Western Price Survey
August 26, 2016
As the end of summer approaches, California is waiting for a large heat wave.
Conditions across the state should remain within seasonal norms the week of Aug. 29, although Southern California should cool late in the week. Despite this forecast, CAISO is not convinced the end of summer is here.
“While many folks are talking about how we are at the end of summer, for the last two consecutive years, we set our annual peak in September,” said Steven Greenlee, a spokesperson for the grid operator. These peaks were reached Sept. 10, 2015 when demand hit 47,358 MW, and Sept. 15, 2014 when use reached 45,089 MW.
California has set annual peaks in September five times since 1998, Greenlee said. “So we are remaining on ‘summer’ mode for at least the next three or four weeks.”
CAISO demand peaked at 38,283 MW Aug. 24, which should be the high for the week. Total renewables production on the CAISO grid reached 11,845 MW Aug. 23.
Peak power prices across the West were generally higher in Aug. 19 to Aug. 26 trading. Palo Verde values eroded 70 cents to $33.05/MWh while other hubs gained between 25 cents and as much as $7.15 by the end of trading.
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Average nighttime power prices dropped between 80 cents and as much as $13.05 during the trading period. Palo Verde off-peak power was down $13.05 in trading, ending at $20.70/MWh.
Meanwhile, working natural gas in storage was 3,350 Bcf as of Aug. 19, according to U.S. Energy Information Administration estimates. This is a net increase of 11 Bcf compared to the previous week. Storage levels are now 8.9 percent greater than a year ago and 11.7 percent greater than the five-year average.
Total natural gas consumption during the EIA report week dipped 5 percent compared with the previous week, driven by a 12 percent drop in use for power generation, the agency noted.
Henry Hub gas spot values added 14 cents in Thursday-to-Thursday trading, ending at $2.86/MMBtu Aug. 25. Western natural gas prices, meanwhile, rose between 3 and 17 cents, with Opal natural gas posting a 17 cent increase to $2.65/MMBtu.
Alberta natural gas was the outlier among hubs. After sagging to 51 cents Aug. 18 from a combination of maintenance constrictions and almost-full storage in the region, the hub price saw a 286 percent increase – up $1.46 to $1.97/ MMBtu [Linda Dailey Paulson].
Archives of the Western Price Survey for the past year are also available online.
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