Western Price Survey
August 24, 2018
Western power prices continued to retreat from recent heat-driven levels, thanks to cooler weather tempering power usage.
Demand in California Independent System Operator territory reached 43,028 MW on Aug. 17, which should be the week’s high. Renewables output on the CAISO grid reached 14,235 MW Aug. 23, satisfying roughly just over a third of demand.
Average peak power prices in the West dropped by between $10.35 and $23.15 in Aug. 16 to Aug. 23 trading. Daytime power prices ranged from $24.80/MWh at Mid-Columbia to $42.20/MWh at South of Path 15.
Peak prices at the Mid-Columbia hub tumbled 48 percent in trading, taking values from $47.97/MWh Aug. 16 to $24.80/MWh Aug. 23.
Off-peak power prices followed suit, losing between $3 and as much as $8.75 in trading. Mid-C nighttime power values tumbled 28 percent in the trading period, ending at $22.05/MWh. Nighttime power prices ranged from $22.05/MWh to as much as $33.95/MWh at SP15.
Working natural gas in storage was 2,435 Bcf as of Aug. 17, according to U.S. Energy Information Administration estimates, a net increase of 48 Bcf compared with the previous week. The last time working gas inventories were less than 2,500 Bcf this late in the refill season was in 2003. The national natural gas supply refill rate will be closely watched as the shoulder season approaches.
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Natural gas demand for power generation decreased 3 percent week over week, according to the EIA.
Nationwide natural gas storage levels are now about 22 percent lower than a year ago and nearly 20 percent below the five-year average.
Inventory is also a concern in Alberta, where gas constraints have led to erratic price movements. Despite regional production increases, “the caverns will not fill this year,” Energy GPS analysts said. With current inventory 76 Bcf less than last year, Energy GPS expects supply issues over the winter.
Henry Hub natural gas spot prices shed 2 cents in trading, ending at $2.97/MMBtu.
Western natural gas prices dropped by between 7 cents and nearly $2 between Aug. 16 and Aug. 23. SoCal CityGate gas values plummeted $1.97 to $4/MMBtu.
What’s ahead: Above-normal temperatures are likely through September in the West, according to the latest National Weather Service seasonal forecast; however, demand in the CAISO region between Aug. 25 and Aug. 30 should be less than 36,000 MW, according to grid-operator forecasts. –Linda Dailey Paulson.
Archives of the Western Price Survey for the past year are also available online.
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