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Western Price Survey

Week's End Edition
June 24, 2011
Western Energy Prices Flounder

Prices for day-ahead peak power in the West sagged in the Friday-to-Friday trading period June 17 to June 24. Only prices at Palo Verde gained significant traction, with peak values at the hub rising $2.25 on average over the period to trade at $41.45/MWh.

Peak prices for other Western hubs performed as follows:

  • Mid-C: Down about 80 cents to about $29/MWh.
  • California-Oregon Border: Up about 40 cents to about $34.40/MWh.
  • NP15: Down $1.25, ending at $36.50/MWh.
  • SP15: Lost around $1.60, trading at almost $38.65/MWh.

For nighttime power, Western hubs earned between 40 cents and about $5.20 over the trading period, with values in the Northwest rising slightly from negative territory. Palo Verde posted the highest average price among hubs for off-peak at more than $20/MWh (see chart).

The Bonneville Power Administration continued periodically cutting non-hydro generation under its "environmental redispatch" initiative. The agency cut 754 MWh of generation June 23, bringing its curtailment total to 83,445 MWh since May 17.

Working natural gas in storage rose to 2.354 Tcf by June 17, after a 98 Bcf net injection, according to the U.S. Energy Information Administration. This was the second-largest addition to the nation's natural gas inventory this year. Current stores are now 258 Bcf below last year's storage amount.

Henry Hub spot prices traded at $4.42/MMBtu June 22, down 10 cents versus the previous Wednesday. By Friday the hub traded for an average of $4.31/MMBtu, a 22-cent drop compared to June 17.

Henry Hub futures ended trading Wednesday at $4.32/MMBtu, a 26-cent drop versus the previous Wednesday. Futures traded Friday at $4.22/MMBtu, according to Bloomberg.

The EIA reported the drop in natural gas prices is the result of milder weather throughout the United States. The West in particular had cooler-than-normal weather for the sixth consecutive week. Average temperatures for the Pacific Coast are expected to remain below seasonal norms throughout the summer, according to Weather Services International.

However, "California may experience a marked increase in power prices between July and August as temperatures shift from cooler than normal to warmer than normal and seasonal hydro production tapers off," said Chris Kostas, senior power and gas analyst with Energy Security Analysis, in a WSI press release. By September, he expects lower California power prices in tandem with cooler conditions.

What's ahead: After drier, mild weather, Seattle starts cooling Wednesday and Thursday, with a few showers possible in the region. Portland starts the week in the high 70s, with cooling as the week progresses. Temperatures in the 70s are forecast for San Francisco throughout the week, with late-season rain possible starting Tuesday night or Wednesday. Forecasters are sticking with 70-degree weather throughout the week for Los Angeles. Meanwhile, 111 °F temperatures are expected in the Palo Verde area Monday and Tuesday [Linda Dailey Paulson].

Western Electricity Prices
Week's End: June 20 - 24, 2011
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 12.41-999.99 12.75-250.96
Mid-Columbia 16.50-40.50 (-)10-3.30
COB 20.25-43.25 (-)2.25-6
NP 15* 29.50-46.75 5.25-11.25
SP 15* 31.50-51 9-20
Palo Verde 33.75-47 7-27

* 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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