Western Price Survey
June 27, 2014
Lower natural gas prices and a heavy dose of renewables and hydropower are keeping power prices in check as summer gets under way.
Peak-power prices failed to move beyond levels set last Friday, with the exception of North of Path 15, which added $4.90 to reach $56.90/MWh. By June 27, prices ranged from $38/MWh at Mid-Columbia to $56.90 at South of Path 15.
Off-peak power prices have been more volatile, especially in the Northwest, owing to hydro production. Mid-C average prices were in the single digits on some days this week. At the end of the week, average off-peak prices ranged from $7.60/MWh at Mid-C to $42.50/MWh at SP15 (see chart).
Renewable-energy production on the Cal-ISO grid surpassed 10,400 MW June 25. Solar production reached 4,645 MW that same day.
Wind production in the Bonneville Power Administration area remains strong, peaking at 4,104 MW June 20. Hydropower production in the area reached nearly 12,625 MW during the week (see "Power Gauge," next page).
Peak demand on the Cal-ISO grid was 36,884 MW June 20, the week's high. Northwest Power Pool demand was 56,668 MW June 23.
Working gas in storage reached 1,829 Bcf as of June 20, according to U.S. Energy Information Administration estimates, a net increase of 110 Bcf from the previous week. Storage levels are now 27.4 percent less than a year ago and 31 percent less than the five-year average. Barclays analysts noted that this was the seventh time in eight weeks that the storage amount exceeded market expectations. It is also the seventh consecutive injection greater than 100 Bcf. The analysts added that recent storage additions showed "the $4.60-4.80 price range was too high for the market balance."
Average Henry Hub natural gas spot values dropped 10 cents since last Thursday, trading June 26 at $4.55/MMBtu. Western prices also generally fell between 4 and 14 cents in Thursday-to-Thursday trading. Malin natural gas lost 14 cents in the trading period, ending at $4.51. The exception, again, was PG&E CityGate, which has been swinging wildly in recent weeks, often counter to other Western hubs. It jumped 92 cents, ending Thursday at $5.10.
What's ahead: Inland California and Arizona temperatures should near or exceed the century mark the week of June 30. The July 1 forecast calls for highs of 107 °F in Bakersfield and 108 °F in Palm Springs. Elsewhere, high temperatures in the low 70s are forecast for the greater San Francisco area while Portland should reach 83 °F July 1 [Linda Dailey Paulson].
Archives of the Western Price Survey for the past year are also available online.
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