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Western Price Survey

July 6, 2018
Heat Sends Western Prices Higher

There were plenty of fireworks in the Western skies on the Fourth of July, but energy prices began popping skyward July 5.

A strong high-pressure ridge over Southern California and the Desert Southwest led to forecasts for July 6 daytime high temperatures of 115 degrees Fahrenheit in Palm Springs, and 112 F in Phoenix. As the heat moves north, Redding, California should see 105 degrees by July 12, as should Medford, Oregon.

The California Independent System Operator called for restricted maintenance operations July 6 and 7 based on forecasts for high loads and temperatures. No Flex Alert had been called as of press time.

CAISO power demand peaked July 5 at 38,716 MW and is forecast to reach 45,438 MW July 6. Northwest Power Pool demand reached 64,655 MW July 5.

Western peak power prices responded, jumping between $1.90 and $33.35 in June 28 to July 5 trading. Mid-Columbia prices added $33.35 to reach $43.05/MWh. Prices traded in a range from $30.95/MWh at North of Path 15 to $53.05/MWh at Palo Verde.

Western nighttime power prices followed suit. Mid-Columbia off-peak power, which had traded at -$3.80/MWh June 28, gained $25.60 in this week’s trading, ending at $21.80/MWh.

Western natural gas prices were generally higher as well in June 28 to July 5 trading. Southern California CityGate was the outlier, jumping roughly $5.10 to end at $8.28/MMBtu, the highest price in the region. In contrast, PG&E CityGate gas values eroded 7 cents to $2.98/MMBtu, and Alberta gas lost 16 cents to end up at $1.03/MMBtu.

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Working natural gas in storage was 2,152 Bcf as of June 29, according to U.S. Energy Information Administration estimates, a net increase of 78 Bcf compared to the previous week. Natural gas storage levels are now 25 percent less than a year ago and 18.6 percent less than the five-year average.

Henry Hub natural gas spot prices lost 10 cents in trading, ending at $2.87/MMBtu.

In June, average natural gas prices were generally lower compared with 2017 (see “Price Trends,” next page). The average high price last month at Henry Hub was $3.01/MMBtu, 6 cents below last year’s average. Western natural gas hubs also lost value year over year, with Southern California Border losing the most value, down 75 cents with an average high price of $2.79/MWh.

Average Western peak power prices in June were roughly $2.90 and as much as $78.50/MWh lower than those in June 2017. Palo Verde saw the widest year-over-year price difference. In 2017, heat spiked Palo Verde prices to almost $124/MWh; this year, the month’s average high price was $45.25/MWh.
–Linda Dailey Paulson.

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.

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Contact Mavis Scanlon, editor with questions regarding Price Survey content.

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