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Western Price Survey

Week's End Edition
August 19, 2011
Western Energy Prices Fluctuate

Western power prices managed to gain a few dollars this week despite falling natural gas prices.

Natural gas prices fell as low temperatures led to a decline in gas consumption for power generation, according to the U.S. Energy Information Administration.

Henry Hub spot prices traded at $3.97/MMBtu on Aug. 17, down 12 cents over the previous Wednesday. By Friday the hub traded for an average of $3.99/MMBtu, an 18-cent loss compared to the previous Friday. Over the same Friday-to-Friday trading period, Western natural gas hubs dropped a few cents, with most hubs falling below $4/MMBtu with the exception of Southern California Border (see chart).

Working natural gas in storage increased to 2.833 Tcf by Friday, Aug. 12, after a 50 Bcf net injection, according to the EIA. Stocks were 175 Bcf less than last year at this time and 73 Bcf below the five-year average.

In the Friday-to-Friday trading period, Aug. 12 to Aug. 19, here's how average peak power prices fared:

  • Mid-C: Jumped about $2.10 to around $33.90/MWh.
  • California-Oregon Border: Up 90 cents to around $36/MWh.
  • NP15: Up 70 cents; traded at $38.55/MWh.
  • SP15: Gained around 90 cents, trading at about $41.85/MWh.
  • Palo Verde: Down about 65 cents, ending trading at almost $39.80/MWh.

Average nighttime prices generally gained value over the trading period, with Pacific Northwest hubs gaining about $3/MWh. SP15 proved the exception, losing around $1.50. By Friday, average off-peak prices in the West ranged from about $25/MWh to almost $30/MWh (see chart).

Peak demand on the Cal-ISO grid failed to meet predictions. The week's high of 39,320 MW was reached Aug. 17. The next uptick in demand is expected Thursday, Aug. 25, when use may exceed 40,700 MW.

What's ahead: Western forecasters seem reluctant to issue definitive predictions beyond the weekend. Seattle forecasters report "little confidence" in any long-term forecast based on an approaching front, which may arrive Monday or Tuesday. One model shows rainfall amounts of about an inch per hour near Bellingham, which is "statistically rare" for August. Temperatures should be seasonally normal during the period, remaining in the 70s. Portland expects to reach the 90-degree mark for the first time this year Saturday. More 90-degree days were forecast in the week ahead; however, it seems the TV meteorologists are hedging that bold prediction, revising the temperatures to "near 90" thanks to that same front entering the region Wednesday or Thursday.

San Francisco's forecast is also uncertain, but temperatures in the 70s and partly cloudy conditions are expected through Aug. 25. Similar question marks dog Southern California weather, with temperatures in the 70s. Hurricane Greg remnants may bring moisture to the region Tuesday through Thursday, but no rain is expected [Linda Dailey Paulson].

Western Electricity Prices
Week's End: August 15 - 19, 2011
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 24.94-996.56 17.24-44.15
Mid-Columbia 31.30-35 18-26.25
COB 33.75-37.75 20-29
NP 15* 38.50-42 23-26.75
SP 15* 39.50-45.25 22.50-29.25
Palo Verde 36.50-42 21.35-30

* 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.

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.

Please contact with questions or comments about this site.

Contact Chris Raphael, editor with questions regarding Price Survey Content.

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