Western Price Survey
September 5, 2014
Forecasts calling for cooler weather and an unexpected uptick in storage made gas prices retreat below the $4 mark in the first week of September.
Working gas in storage reached 2,709 Bcf as of Aug. 29, according to U.S. Energy Information Administration estimates, a net increase of 79 Bcf from the previous week. Storage levels are now 14.8 percent less than a year ago and 15.4 percent less than the five-year average.
Henry Hub natural gas spot values were down 13 cents since last Thursday to trade Sept. 4 at $3.89/MMBtu. Western prices also tumbled, losing between 5 and 21 cents in the Aug. 28 to Sept. 4 trading period. PG&E CityGate showed the largest loss, falling 21 cents to $4.34, while Malin natural gas dropped 5 cents to $3.82/MMBtu.
A combination of a cooler near-term weather forecast and a greater-than-expected addition to storage depressed prices, according to a Sept. 5 Barclays report.
Meanwhile, Western power prices ended the week mixed, with Palo Verde average peak values falling $7.05 to $38.40/MWh in the Aug. 29 to Sept. 5 trading period. Northwest peak-power prices, by contrast, added a few dollars by the end of trading.
Average peak prices ranged from $38.40/MWh at Palo Verde to $51 at South of Path 15 by Sept. 5.
Off-peak prices were also mixed during the trading period, varying by a dollar or two. Northwest hubs added roughly two or three dollars, while Palo Verde lost $1.35 to $34.80/MWh. Average off-peak prices Friday ranged from $34.80 at Palo Verde to $42.50 at SP15.
Renewable-energy production on the Cal-ISO grid reached 9,112 MW on Aug. 30. Solar production peaked at a record-setting 4,810 MW Sept. 1, surpassing the standing peak production record of 4,801 MW, reached July 21. Thermal generation reached 18,531 MW Sept. 2 (see "Power Gauge," next page) and exceeded 18,000 MW for six consecutive hours that same day.
Peak demand on the Cal-ISO grid was 40,123 MW Sept. 1, which should be the week's high. Northwest Power Pool demand reached 55,233 MW Sept. 3, but the week's high of 55,659 MW was anticipated Sept. 5.
Natural gas prices were higher this August compared with August 2013, but trailed five-year average values significantly (see "Price Trends," next page).
What's ahead: California and Arizona could see variable weather early in the week, the result of Tropical Cyclone Norbert, which may bring cooler temperatures and rain to Arizona [Linda Dailey Paulson].
Archives of the Western Price Survey for the past year are also available online.
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