Western Price Survey
Week's End Edition
Hotter weather throughout the West translated into higher electricity prices at the start of the week, but prices cooled midweek. By Friday, Aug. 27, average daytime prices for all hubs lost value compared with Aug. 20.
Palo Verde average peak prices lost more than $25/MWh between Monday and Friday as temperatures cooled. The hub ended the week with an average price of $33.55/MWh, but recorded the week's high for spot prices among Western hubs at $65/MWh.
South of Path 15 average peak prices closed at $33.14/MWh, down $9.74 versus the previous Friday. NP15 pricing lost $8.86, with a Friday average peak price of $32.80/MWh.
Average price declines at Mid-Columbia and the California-Oregon Border were not as dramatic. Mid-C stayed in the black until Friday, when it lost 84 cents/MWh compared to Aug. 20; COB lost $1.75/MWh Aug. 27 compared to the previous week, ending with an average price of $24.82/MWh.
For off-peak power, Western hubs lost value throughout the week as well. Average prices ended in a range between about $24.75 and $26.25/MWh, which was a loss of between about $1.80 and $6.15/MWh compared to nighttime average prices Aug. 20. The greatest loss in Friday-to-Friday trading was posted by SP15.
Peak demand on the Cal-ISO grid reached 47,282 MW on Wednesday at 4 p.m., the week's high.
According to the U.S. Energy Information Administration, a 40 Bcf addition to natural gas reserves provided a total of 3.052 Tcf in storage as of Aug. 20. Inventories are now 177 Bcf greater than the five-year average.
Unseasonably warm weather since early May contributed to increased natural gas demand for electric generation. Still, surplus stocks remain greater than historical levels.
Henry Hub spot prices traded at $3.99/MMBtu on Aug. 25, down 8 percent from the preceding Wednesday, according to the EIA. The average price on Friday was $3.75/MMBtu.
Gas futures for the hub traded at $3.87/MMBtu on Aug. 25, a 9 percent decrease from the preceding Wednesday. EIA stated that this is the first time since May 2010 that both spot prices and futures have fallen below $4/MMBtu. Bloomberg reported futures were trading at $3.71/MMBtu Friday, Aug. 27.
What's ahead: A cold front extending from British Columbia into California started cooling the West Coast Aug. 26. Rain returns to Seattle and Portland Monday. Onshore flow is expected to keep temperatures 5 to 10 °F cooler throughout Oregon. San Francisco expects some warming with a return to seasonal norms by Wednesday. After experiencing record highs in many areas this week, Los Angeles-area temperatures are expected to be cooler through Monday. A brief warming trend follows, which is expected to last through at least Wednesday. Meteorologists are iffy about conditions beyond Wednesday for most of the West Coast [Linda Dailey Paulson].
* 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.
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