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Western Price Survey

July 20, 2018
California Energy Prices Post Wild Gains

California power and natural gas prices shot higher ahead of forecasts for higher-than-normal temperatures throughout the week beginning July 23, which is expected to lead to several days of heavy power demand.

South of Path 15 daytime power values surpassed $100/MWh July 19 while Southern California CityGate natural gas prices exceeded $13/MMBtu, increases of nearly 92 percent and 172 percent, respectively, compared with prices on July 12. The California Independent System Operator issued restricted maintenance operation notices for July 23 through July 25 in anticipation of some of the heaviest loads of the summer. Both daytime and overnight temperatures are expected to be high statewide, said Steven Greenlee, a CAISO spokesman.

Ongoing maintenance on infrastructure that brings natural gas into California is limiting flows by more than 500 MMcf/d, the U.S. Energy Information Administration said in its Natural Gas Weekly Update.

Natural gas prices at Southern California CityGate surged $8.45 to $13.36/MMBtu. Prices at the Southern California Border hub gained 28 cents in July 12 through 19 trading, ending at $3.97/MMBtu; natural gas prices at other Western hubs lost between a penny and 22 cents.

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For a second week, SP 15 peak power prices recorded the biggest gain among Western hubs, adding $51.85 to $108.25/MWh. Palo Verde values jumped $40.50 to $88.50/MWh. Other Western hubs shed between $14.15 and roughly $20 in trading. By July 19, daytime prices ranged from $30.10/MWh at Mid-Columbia to $108.25/MWh at SP 15.

Western nighttime power prices followed a similar trajectory, with SP 15 gaining $22.85 to $59.60/MWh and Mid-C falling $7.40, ending at $23/MWh.

CAISO demand reached 42,584 MW July 19, which should be the week’s high. Demand is forecast to reach 47,162 MW July 25, well below CAISO’s all-time peak record of 50,270 MW in July 2006.

Grid operators continue monitoring wildfires across the West, particularly the Substation Fire near The Dalles, Oregon, which is close to transmission lines.

The Substation Fire started in the general proximity of Bonneville Power Administration’s Celilo Converter Station, but not on the converter station property, according to BPA, which noted in a July 19 news release that it is working closely with emergency managers and local utilities to de-energize and re-energize transmission lines as needed.

What’s Ahead: Searing daytime highs are expected across California. The Central Valley should get triple-digit heat through July 26. Temperatures in the mid-90s are expected in Portland July 23 and 24 while the temperature in Seattle is forecast to hover at around 90 degrees. –Linda Dailey Paulson.

Archives of the Western Price Survey for the past year are also available online.

The Western Price Survey is excerpted from Energy NewsData's comprehensive regional news services. See for yourself how NewsData reporters put events in an accurate and meaningful context -- request a sample of either or both California Energy Markets and Clearing Up.

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Contact Mavis Scanlon, editor with questions regarding Price Survey content.

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