Western Price Survey
Week's End Edition
It's not often that the Mid-Columbia hub sets the highest price for peak electricity, but that's what happened this week.
As Washington and Oregon battled triple-digit temperatures, Mid-C peak power went as high as $55/MWh -- more than the most expensive spot power in Southern California and Arizona.
As the jet stream moved north this week, a large high pressure system developed over the Northwest, ushering in record temperatures. Seattle posted its hottest day on record -- 103 °F -- and Portland clocked in at 106, just one degree shy of an all-time record.
By the end of the week, however, temperatures had cooled, reducing energy demand and prices. Daytime power at Mid-Columbia dropped $9 to finish the week at an average $38.80/MWh, while nighttime deliveries inched up $1 to $32.82.
The California-Oregon border saw peak prices fall over $9 to an average of $40.67/MWh. Off-peak trades added less than $1 to $33.22.
In the Golden State, power demand rose from 43,000 MW on Monday to a weekly high of 43,400 MW on Tuesday and then fell to 38,200 MW by Thursday, according to the California Independent System Operator. Demand is expected to decline by 2,000-3,000 MW over the weekend.
The demand pattern followed mild weather in California, with temperatures in the low 60s in San Francisco and the mid 80s in Los Angeles.
Average California peak prices lost $8-$10 to settle close to $39/MWh at North of Path 15 and South of Path 15. Trades for nighttime power gained $4-$5, settling around $30 at both hubs.
At Palo Verde, values for peak power descended over $8 to $37.44/MWh; nighttime trades increased nearly $5 to $28.65.
Mild weather and little cooling demand helped boost the injection of natural gas last week by 71 Bcf to 3.023 Tcf, the Energy Information Administration said. It was the first week that stockpiles vaulted higher than 3 Tcf since the federal government started tracking weekly gas stocks in 1994. Compared to last year, supplies are 23.3 percent greater, and 18.8 percent higher than the five-year average.
Western stockpiles, however, fell last week as scorching temperatures pumped up cooling demand across the region. Stockpiles dipped by 1 Bcf to 441 Bcf, but remain 27.8 percent higher than a year ago and 22.2 percent higher than the five-year average.
Natural gas prices remain about 74 percent lower since last summer. This week, spot natural gas prices showed little direction on Nymex, opening the week at $3.60/MMBtu but closing out Friday at $3.74/MMBtu. Natural gas trades at Western hubs universally fell about 20 to 30 cents/MMBtu.
What's Ahead: Cool weather arriving next week will be a boost for firefighters, as blazes have broken out in Washington state during the heat wave. More than 40 new wildfires were reported across the state this week, and more than 30 counties reported a high or very high fire danger thanks to dry conditions. A lightning strike on Tuesday touched off a fire near Chelan that has grown to become the biggest wildfire in the state and prompted the mobilization of more than 400 firefighters, according to the state Department of Natural Resources. The fire, which has burned more than 700 acres, has forced the evacuation of more than 100 people.
The weather is expected to warm slightly in southern California and the desert Southwest this weekend. California is also forecast to have one of the worst wildfire seasons on record thanks to an ongoing drought and sky-high temperatures, according to a U.S. Forest Service report. Most of California, and western Oregon and Washington are extremely or severely dry, according to the July-September Palmer Drought Severity Index. [Kristina Shevory].
* 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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