Western Price Survey
July 7, 2017
After a brutal heat wave sent power prices soaring at the end of June, they remained relatively high at some hubs during the abbreviated trading week. With temperatures expected to remain above the century mark in many locations in the West, power prices remain in flux.
Markets were closed Tuesday, July 4, in observance of Independence Day.
South of Path 15 daytime power gained $10.10 in Friday-to-Friday trading, ending at $42.70/MWh. In contrast, Mid-Columbia dropped a couple of dollars.
In its only trade of the week, North of Path 15 peak power posted an average price of $49.50/MWh July 6, a 41 percent drop compared with the price of $84.17/MWh posted June 21, when a heat wave engulfed areas of California and the Southwest.
Off-peak values added between 5 cents and $6.45 between June 30 and July 7. California-Oregon Border saw the greatest gains, adding $6.45 to reach $25.35/MWh
Meanwhile, working natural gas in storage was 2,888 Bcf as of June 30, according to U.S. Energy Information Administration estimates. This is a net increase of 72 Bcf compared to the previous week.
Henry Hub gas spot values dropped 14 cents to end at $2.88/MMBtu between June 30 and July 6.
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Western natural gas prices varied. Alberta natural gas lost the most, down 83 cents to 91 cents/MMBtu in trading, while Southern California Border gas gained 49 cents to $3.22/MMBtu.
The sharp downturn in Alberta gas pricing is the result of pipeline maintenance bottlenecks in the Midwestern United States that are backing supplies into Alberta, said Jeff Richter, principal/owner of Portland-based EnergyGPS.
U.S. demand has been soft, which has also weighed on prices, Richter said. Typically, Canadian natural gas imports are between 5.9 and 6 Bcf; currently, imports are roughly 5.2 Bcf.
“There’s not really a home for that [natural] gas besides storage or price signal,” Richter said.
CAISO demand peaked at 42,049 MW July 6, but the week’s high demand is expected to occur July 7, when demand is forecast to reach 46,234 MW.
In June, average natural gas prices varied in comparison to those in June 2016 (see “Price Trends,” next page). The average high price at Henry Hub was $3.07/MMBtu, which was about 14 cents/MMBtu more than last year. Among Western hubs, Southern California Border natural gas was roughly 45 cents/MMBtu higher than in June of last year, while values at PG&E CityGate eroded 7 cents month to month.
Average Western power prices in June were generally between $23.45 and $58.85 greater than last year. Palo Verde saw the greatest hike, as its average peak price soared above $120/MWh with searing, record heat. Mid-Columbia proved the exception, down $5.75 year over year at an average of $29.45/MWh.
Archives of the Western Price Survey for the past year are also available online.
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