Western Price Survey
June 24, 2016
With another round of intense heat -- well above the century mark in some parts of Central California -- expected the week of June 27, peak power prices spiked between $11 and as much as almost $21 in trading June 23 to June 24.
Although the increases were significant, prices failed to best highs reached June 17 ahead of a heat wave in Southern California and Southwestern states. Overall, Western daytime prices fell between $2 and $20.90 in June 17 to June 24 trading. Prices June 24 ranged from $33.20/MWh at Mid-Columbia to $44.75/MWh at South of Path 15.
Average off-peak power prices generally lost $3 by the end of trading. South of Path 15 added 65 cents to reach $32.20 by June 24.
In the week ahead, CAISO expects demand of roughly 44,100 MW both June 27 and 28. Warmer, dry weather is expected across the West starting Monday, when Seattle highs should surpass the 80-degree mark, according to the National Weather Service. Tuesday and Wednesday are the hottest days anticipated in Northern California, when some areas may see 105 °F.
Working natural gas in storage was 3,103 Bcf as of June 17, according to U.S. Energy Information Administration estimates. This is a net increase of 62 Bcf compared to the previous week and the earliest time on record that working gas in storage has exceeded 3,000 Bcf.
"Natural gas consumption during this period has exceeded both year-ago and 2012 levels, a trend driven by growth in power-sector consumption," noted the EIA weekly report. Natural gas for power generation is now at 26 Bcf/d, a record high for this time of year, according to the agency.
Henry Hub gas spot values gained 7 cents in Thursday-to-Thursday trading, ending at $2.68/MMBtu June 23. On Wednesday, Henry Hub hit $2.78/MMBtu -- the highest price the hub has posted since August 2015.
Western natural gas values surpassed the benchmark price, with average prices jumping between 14 cents and as much as 47 cents. Sumas posted the greatest gains, adding 47 cents to end at $2.30/MMBtu June 23.
Consumption was also higher during the EIA report week, with a 7 percent increase in natural gas used for power generation. This was 6 percent greater than the year-ago levels.
EIA states that the "incentive to inject natural gas into storage remains high." Injections into working gas, to date, are roughly 15 percent ahead of the 2012 injection pace, primarily because of the growth in natural gas supply compared with demand.
Demand peaked on the CAISO grid at 44,454 MW June 20, which was the high for the week.
Total renewables production on the CAISO grid reached 13,579 MW June 22, and total solar production reached 7,870 MW that same day. Thermal generation peaked June 20 at 23,440 MW [Linda Dailey Paulson].
Archives of the Western Price Survey for the past year are also available online.
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