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Western Price Survey

August 4, 2017
Extreme Weather Sends Prices Soaring; California Operations Quiet During Heat

Oppressively hot daytime temperatures across the West sent air conditioners humming and electricity prices soaring.

Western spot power prices climbed to highs between $140/MWh and $160/MWh Aug. 1. But by Aug. 4, average hub prices lost between 40 cents and $5.30 compared with the previous week. Palo Verde, however, added 60 cents to $38.30/MWh.

Off-peak prices varied by week’s end, with Mid-Columbia adding $2.50 to end at $31.80/MWh.

Despite the fireworks, California load this summer has yet to be on par with the historic peak of 50,270 MW, recorded in 2006.

The California Independent System Operator imposed restricted maintenance operations between Aug. 1 and Aug. 3 based on heat-expected loads; however, load aligned with seasonal norms due to monsoon conditions across Southern California, according to Steven Greenlee, CAISO spokesman.

“Clouds, some rain and thunderstorms in that area have helped keep temperatures down, which has helped keep demand down a little bit,” said Greenlee. This week’s peak demand of 44,843 MW, recorded Aug. 3, is well below last year’s peak of 46,232 MW.

Southern California weather has suppressed CAISO solar generation. Cloud-cover effects can be seen in the recent generation variability that starts at about noon daily, said Greenlee. Drops as abrupt as from 6,500 MW to 5,800 MW occurred.

Working natural gas in storage was 3,010 Bcf as of July 28, according to U.S. Energy Information Administration estimates, a net increase of 20 Bcf versus the previous week.

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Henry Hub gas spot values fell 14 cents between July 27 and Aug. 3 to end at $2.78/MMBtu.

Western natural gas prices generally followed suit, dropping between 3 cents and as much as 17 cents in Thursday-to-Thursday trading. Southern California Border and Alberta natural gas were the exception; Alberta natural gas jumped 50 cents to $1.51/MMBtu by Thursday, the largest gain among Western hubs.

In July, average natural gas prices varied in comparison to those in June 2016 (see “Price Trends,” next page). The average high price at Henry Hub was $3.10/MMBtu, which was about 16 cents/MMBtu more than last year.

Average Western power prices in July were between $4.75 and $13.60/MWh greater than in 2016. –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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