Western Price Survey
July 15, 2016
Western natural gas and power prices saw positive movement this week as national natural gas consumption and California renewables generation increased.
Working natural gas in storage was 3,246 Bcf as of July 8, according to U.S. Energy Information Administration estimates. This is a net increase of 64 Bcf compared to the previous week. Storage levels are now 18.5 percent greater than a year ago and 22.1 percent greater than the five-year average.
Natural gas use rose 5 percent week over week, according to the EIA, with use for power generation up 9 percent. This was an average use of 35.2 Bcf/day and is more than half of the total consumption recorded this week.
Henry Hub gas spot values shed 8 cents in Thursday-to-Thursday trading, ending at $2.78/MMBtu July 14.
In contrast, Western natural gas values generally moved higher, adding between 10 cents and as much as 30 cents. Alberta was the exception, down 3 cents to $1.69/MMBtu. PG&E CityGate posted the greatest gains, up 30 cents to end at $2.99/MMBtu Thursday.
"Industry observers attributed large increases in western prices to maintenance limiting imports from Canada," according to the EIA. The agency also observed that at 319 Bcf, Pacific-region stocks are below year-ago levels (333 Bcf), making it the only region to have less natural gas in storage than the previous year.
"With the shut-in of the Aliso Canyon natural gas storage field in Southern California, storage stocks on the West Coast have been closely monitored by market observers, particularly as electricity demand reaches its highest levels of the season during the hottest days of summer," EIA said in its weekly report.
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Demand peaked on the CAISO grid at 41,472 MW July 14, which was the week's high. Total renewables production reached 13,056 MW July 9. Thermal generation peaked July 14 at 14,292 MW.
Solar power production in California reached a record-high instantaneous peak output of 8,030 MW July 12. This amount is almost twice the amount of solar produced in mid-2014 and nearly 2,000 MW higher than in May of last year, according to the grid operator.
Average peak power prices added between $1.20 and $9.75 in July 8 to July 15 trading. Palo Verde saw the greatest gains, up $9.75 to $39.95/MWh. Prices July 15 ranged from $22.15/MWh at Mid-Columbia to $39.95/MWh at Palo Verde.
Likewise, average nighttime power prices gained between $2.15 and $3.25 in trading. South of Path 15 added $3.25 to end at $29.50/MWh [Linda Dailey Paulson].
Archives of the Western Price Survey for the past year are also available online.
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