Western Price Survey
September 7, 2018
Maximizing natural gas storage ahead of peak winter demand has been an ongoing concern for Southern California Gas Co. amid continued infrastructure repair and maintenance issues.
The California Public Utilities Commission on March 13 directed the utility to prepare a plan to increase injections at all of its gas storage fields for reliability purposes, citing concerns about its storage inventory, system operations and ability to deliver gas this summer and next winter.
As of Sept. 6, SoCal Gas had 76.4 Bcf of natural gas in storage, according to data on ENVOY, the utility’s electronic information bulletin board. This is the highest inventory level SoCal Gas has had since early 2016, according to the U.S. Energy Information Administration.
The net regional storage addition was 5 Bcf during the EIA’s Wednesday-to-Wednesday report week.
The addition occurred despite greater statewide demand. SoCal Gas natural gas sendouts increased 19 percent week over week, according to the EIA. Pacific Gas & Electric expected a 6-percent uptick in its Sept. 6 sendouts, based on slightly higher temperatures in Northern California.
Western natural gas values reflected demand patterns, with prices generally up in Aug. 30 to Sept. 6 trading. El Paso-Permian Basin gas added 87 cents to reach $2.21/MMBtu. SoCal CityGate was the exception, with the price at that hub down 38 cents to $4.43/MMBtu. Henry Hub natural gas spot prices eroded by 2 cents in Thursday-to-Thursday trading, ending at $2.88/MMBtu.
California Independent System Operator demand peaked at 36,258 MW Sept. 4; thermal generation supplied roughly 44 percent of demand that day. CAISO forecast the week’s highest demand on Sept. 7, when load was expected to reach about 37,702 MW.
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Total renewables output reached 15,340 MW Aug. 31, fulfilling 43 percent of demand, while solar sources supplied roughly 29 percent.
Average Western peak power prices rose between $2.10 and $12 in Thursday-to-Thursday trading. California-Oregon Border peak power gained the most value, up 44 percent to $39.50/MWh. Off-peak power prices followed suit. Mid-Columbia nighttime power prices jumped 33 percent, up $7.90 to end at $31.65/MWh.
In August, average natural gas prices were generally greater compared with 2017 (see “Price Trends,” next page). The average high price last month at Henry Hub was $3.01/MMBtu, 1 cent more than last year. Western natural gas hubs, save for Malin, gained value year over year. SoCal Border added $2.21, with an average high price of $6.32/MMBtu. Malin values eroded 8 cents to $2.83/MMBtu.
Early August heat bolstered average Western peak power prices. Compared with 2017, Palo Verde gained the most year over year, skyrocketing $233.10 to $377.50/MWh. North of Path 15 prices, however, fell roughly 90 cents to $132.10/MWh.
Archives of the Western Price Survey for the past year are also available online.
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