Western Price Survey
Week's End Edition
Western electricity prices continued to gain momentum this week as demand steadily increased thanks to dry weather conditions, particularly in Southern and Central California.
Extreme temperatures prompted heat advisories, with some areas around Los Angeles exceeding 105 °F late in the week. Temperatures in some regions east of LA were even higher.
Not surprisingly, South of Path 15 experienced the greatest gains for average peak electricity prices among the Western hubs. Average daytime prices jumped $15.78 for the week, with prices on July 16 about $11 higher compared to the previous Friday. North of Path 15 prices increased as well, ending July 16 up almost $6 compared to last week.
Mid-Columbia daytime power prices rebounded late in the week, trading around $39/MWh, up about $8 from the July 9 price. California-Oregon Border peak prices experienced a similar gain.
At Palo Verde, average peak prices increased steadily throughout the week, ending at $50.13/MWh July 16, up about $8 more than the previous Friday's price. The hub posted the highest spot price among Western hubs, $56/MWh.
Average prices for nighttime power gained between $6.30 and $9.45/MWh at Western hubs between Thursday and Friday. Values at Mid-C improved, ending the week at an average of $30.72/MWh, up more than $9 compared to the July 9 average price.
At SP15 and NP15, off-peak electricity average prices were between $36.60 and $45.40/MWh, up significantly compared with the $28 and $29/MWh prices recorded July 9.
Peak demand on the Cal-ISO grid was expected to reach the week's high of 47,142 MW on July 16.
According to the U.S. Energy Information Administration, a 78 Bcf addition to natural gas storage for the week ending July 9 provided a total of 2.84 Tcf in storage. Inventories, now 274 Bcf greater than the five-year average, have exceeded the five-year average for 16 consecutive weeks. Storage withdrawals in the eastern United States and low imports from Canada are being offset by injections in other regions.
Henry Hub spot prices traded at $4.39/MMBtu on Wednesday, July 14, down 37 cents from the preceding Wednesday, according to the EIA. Spot prices traded at an average of $4.67/MMBtu two days later, however.
What's ahead: A high pressure ridge will move into the Pacific Northwest Wednesday, bringing with it the possibility of rain plus cooler temperatures. Cooler conditions are also expected in Northern California starting Monday, with temperatures in the 70s for the Bay Area and the mid-80s or 90s in Monterey County. After scorching weather, some areas of Southern California expect cooler temperatures during the week ahead. But temperatures in the southern portion of the Central Valley -- Fresno and Bakersfield -- are expected to remain at or near 100 °F Monday [Linda Dailey Paulson].
* Prices represent both day-ahead locational marginal prices (financial swaps, or EZ Gen DA LMPs) and quasi-swap prices (EZ Gen) as reported by ICE.
Archives of the Western Price Survey for the past year are also available online.
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