Western Price Survey
July 11, 2014
Western power prices saw sharp gains on expectations of intense heat lasting into at least Tuesday, July 15. This prompted average daytime power prices to climb to the $60 mark by Friday.
Rising temperatures across the Northwest -- with some areas' forecast highs anticipated to near or exceed 100 °F Monday and Tuesday -- sent average Mid-Columbia peak prices to $63.35/MWh on Friday, up $23.45 over the trading period. California-Oregon Border prices saw a similar rise.
Markets were closed Friday, July 4 for the Independence Day holiday. Trades made July 3 were earmarked for July 7 delivery.
Warmer temperatures are expected across inland California as well. Fresno is expected to reach 106 °F by July 14, while Bakersfield should be 107 °F that same day. California daytime power prices gained roughly $3 on average over the trading week. By July 11, Western prices ranged from $58.95/MWh at Palo Verde to $65.40/MWh at the California-Oregon Border.
Off-peak power prices in the Northwest were up roughly $10 over the trading period. Palo Verde nighttime power added $3.60, while California hubs posted no trades July 11. Average off-peak prices Friday ranged from $37.05/MWh at Mid-C to $45.85 at COB (see chart).
Working gas in storage reached 2,022 Bcf as of July 4, according to U.S. Energy Information Administration estimates, a net increase of 93 Bcf from the previous week. Storage levels are now 24.4 percent less than a year ago and 27.6 percent less than the five-year average.
Natural gas prices tumbled, with Henry Hub gas spot values dropping 28 cents since last Wednesday, trading July 10 at $4.12/MMBtu. Western prices fell between 12 and 24 cents over the trading period, led by Southern California Border natural gas, which lost 24 cents to end at $4.44/MMBtu.
Lower natural gas prices across the U.S. can be attributed, in part, to production growth that "has exceeded expectations," according to Barclays analysts. This has helped assuage concerns about storage levels, which continue narrowing. There should be 3.4 Tcf of natural gas in storage by Oct. 31. Prices should average $4.40/MMBtu for the remainder of the summer, given normal weather, Barclays analysts said.
Peak demand on the Cal-ISO grid reached 41,359 MW July 8, which should be the week's high. Demand should be around 42,425 MW July 14, according to the grid operator [Linda Dailey Paulson].
Archives of the Western Price Survey for the past year are also available online.
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