Western Price Survey
August 12, 2016
Bright, warm days in California are increasing power demand, some of which is being offset by record solar production.
Demand peaked on the CAISO grid at 38,322 MW Aug. 11, but the week’s high was forecast to occur Friday, when use was projected to reach 38,677 MW.
“Temperatures across the state are rising and we are expecting to see loads increase into the low 40,000 MW [range]” beginning Aug. 14, said CAISO spokesperson Steven Greenlee. Demand should reach 46,300 MW by Aug. 16.
The grid operator set a solar production record on Aug. 7, recording a new instantaneous solar peak of 8,352 MW. The previous peak of 8,310 MW was reached Aug. 5. Total renewables production on the CAISO grid reached 11,464 MW on Aug. 8 (see “Power Gauge” on next page).
In response to the expected heat, Western peak power prices jumped by $11 to $17/MWh over the trading week (see chart). California-Oregon Border posted the greatest gains, up $17.60 to $48.25/MWh.
Average nighttime power prices added between $3.50 and as much as $7.60/MWh in trading. Mid-Columbia posted the greatest increase, up $7.60 to $28/MWh.
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Meanwhile, working natural gas in storage was 3,317 Bcf as of Aug. 5, according to U.S. Energy Information Administration estimates. This is a net increase of 29 Bcf compared to the previous week. Storage levels are now 12.2 percent greater than a year ago and 15.3 percent greater than the five-year average.
Henry Hub gas spot values dropped 22 cents in Thursday-to-Thursday trading, ending at $2.67/MMBtu Aug. 11.
Western natural gas prices followed suit, losing between 12 and 60 cents. Alberta natural gas posted the greatest loss, plunging 60 cents to $1.28/MMBtu by the end of trading.
Natural gas storage in Southern California has been relatively flat this summer, according to the EIA’s Aug. 9 “Today in Energy” report. The region has not injected inventory to meet demand for the upcoming winter as a result of the moratorium on injections at the Aliso Canyon gas-storage facility; currently storage there is limited to 15 Bcf. Other storage in the region is at 93 percent of capacity, or 46 Bcf, according to EIA estimates. Resumed natural gas injections at Aliso require regulatory approval; Southern California Gas Co. hopes to begin reinjection in September on wells that have passed safety tests (see story at ). [Linda Dailey Paulson].
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