Western Price Survey
July 27, 2018
Searing temperatures across the Western U.S. combined with constrained Southern California natural gas supplies sent energy prices climbing for yet another week.
Temperatures hit new records from Washington State to the Desert Southwest. The nation’s high of 127 degrees was recorded at Death Valley July 23 through July 26 while Seattle climbed to 92 degrees on July 26.
Pacific Northwest peak power prices increased more than 500 percent in July 19 to July 26 trading.
Mid-Columbia prices spiked 550 percent by July 26 when the hub ended trading at $195.55/MWh
Western peak power prices reached the week’s zenith on July 24. South of Path 15 posted the highest daytime power price at $377.30/MWh; however, it saw the least price variation, changing only 55 percent in Thursday-to-Thursday trading. By July 26, the hub traded at $167.90/MWh.
Despite the increases, peak power prices in this latest heatwave remained below those recorded in the 2006 heatwave. At that time, the California Independent System Operator had a $400/MWh price cap, to which both North and South of Path 15 climbed. That cap is now $1,000/MWh.
Heat-sparked demand, system constraints, unplanned maintenance, and lower levels of hydro generation are among the factors challenging the region’s natural gas supplies, according to the U.S. Energy Information Administration. These conditions prompted Southern California Gas Co. to issue system-wide voluntary curtailments for its electric generation customers July 24 through July 25.
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The trajectory for natural gas prices over the trading period was similar to those of power prices. SoCal CityGate natural gas peaked at $39.31/MMBtu July 23; by July 26, the hub traded at $15.80/MMBtu, a gain of $2.44 over the trading period. SoCal Border natural gas jumped $3.05, ending at $7.02/MMBtu.
Natural gas prices at the Malin hub were even at $2.48/MMBtu, while El Paso-Permian Basin natural gas fell 24 cents to $1.88/MMBtu.
To address conditions, the CAISO issued restricted maintenance operation notices July 23 through 26 as well as Flex Alerts July 24 and 25. The grid operator said customers conserved more than 1 GW over the two days.
CAISO demand reached 46,487 MW July 25, which is well below the all-time peak of 50,270 MW recorded in July 2006. The grid operator set a year-to-date record for instantaneous peak demand at 46,424 MW July 25. That same day, Northwest Power Pool demand was 70,453 MW.
With three consecutive days of 115-degree-plus heat in the Phoenix area, Arizona Public Service demand was 7,320 MW July 24, nearing its 7,363-MW record set last year.
Archives of the Western Price Survey for the past year are also available online.
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