Western Price Survey
August 11, 2017
Temperatures in the western United States are gradually decreasing to levels on par with or below seasonal norms across the region, taking the heat out of power prices.
Average prices at Western hubs lost between roughly $6 and as much as $20.40 compared with the previous week. By Aug. 11, Mid-Columbia saw the greatest drop, down $20.40 to $24.75/MWh in trading.
Off-peak average values also dropped between Aug. 4 and Aug. 11, losing $1.70 to as much as $11.70 in the trading period.
“Two things are going to happen” with the cooler weather, said Energy GPS analysts in an Aug. 10 report. “First every balancing authority will start to see their load profiles shift down to where the peak demand will be dropping below the 20 GW mark throughout the region.” Peak demand has not been this low since mid-July.
Second, wind output will also increase, analysts expect, lasting into the week of Aug. 14. Thus, “some of the natural gas units that have been running will need to pull back on their output,” the Energy GPS report noted.
Working natural gas in storage was 3,038 Bcf as of Aug. 4, according to U.S. Energy Information Administration estimates. This is a net increase of 28 Bcf compared to the previous week.
Storage levels are now 8.3 percent less than a year ago and 2 percent greater than the five-year average. This is the fifth consecutive week storage additions have been less than the five-year average amount.
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Henry Hub gas spot prices gained 10 cents between Aug. 3 and Aug. 10 to end at $2.88/MMBtu.
Western natural gas values generally followed suit, adding between 2 and 14 cents in Thursday-to-Thursday trading. El Paso-Permian gas rose to $2.67/MMBtu by Aug. 10, which was the greatest price gain among Western hubs.
Southern California Border was the exception, down 10 cents to end at $2.82/MMBtu in trading.
CAISO demand peaked at 41,861 MW Aug. 4, but during the recent week, grid demand reached 40,680 MW Aug. 8.
In the Pacific Northwest, a generation unit at the U.S. Army Corps of Engineers’ Lower Monumental Lock and Dam in southeast Washington was taken off line after an oil leak was reported Aug. 3. Hydroelectric generator unit No. 2, the primary generating unit at the dam, will remain off line until repairs are completed.
The Corps estimates 742 gallons of oil trickled into the Snake River from the unit over a seven-month span. The nameplate capacity for each turbine is 135 MW; the dam’s total generating capacity is 810 MW. No timeline has been given for the unit’s return to service. –Linda Dailey Paulson.
Archives of the Western Price Survey for the past year are also available online.
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