Western Price Survey
July 19, 2013
Power prices in the West are lately being driven more by electricity demand than the vagaries of the natural gas markets.
On Tuesday, July 16, peak prices at the Mid-Columbia and California-Oregon Border hubs moved past $60/MWh as hot weather entered the region, and prices outpaced values even at the transmission-congested SP15 hub (see chart at right). By the end of the week, however, prices fell back.
Meanwhile, Cal-ISO power use reached 38,994 MW on July 18. The grid operator expected demand to reach 39,205 MW on July 19, which would be the week's high (see "Power Gauge," next page).
Here's how average prices for peak power fared in the May 12 to May 19 trading period:
Off-peak prices in the West dropped a dollar or two since last July 12, and finished the trading period in the range of $28.40/MWh at Mid-C to $39.80/MWh at SP15.
Working gas in storage reached 2,745 Bcf as of Friday, July 12, according to U.S. Energy Information Administration estimates, a net increase of 58 Bcf from the previous week. Storage levels are now 13.1 percent less than a year ago and 1.2 percent below the five-year average.
The addition to natural gas storage was less than expected, and pushed gas prices higher, Barclays analysts said in their weekly commodities report. Western gas prices moved higher over the Friday-to-Friday period, with Malin gas increasing 22 cents to $3.72/MMBtu and PG&E CityGate up 18 cents to almost $3.94 by July 19 (see table at right).
The Mountain Fire in the San Jacinto Mountains in Riverside County so far has burned about 22,000 acres and is only 15 percent contained, Cal Fire reported Friday. The fire is burning just south of Palm Springs.
What's ahead: Above-normal temperatures are expected in California and Arizona between July 24 and 28, according to the National Weather Service. Normal temperatures are forecast for Washington and Oregon during that period, though more local forecasts are calling for Portland to reach a high of 95 °F on Tuesday. According to the NWS, most of the West should have above-normal temperatures between July 26 and Aug. 1 [Linda Dailey Paulson].
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