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Western Price Survey

September 13, 2013
Power Prices Fall as Heat Exits

Power prices dropped from the previous week's highs as temperatures fell across the West.

Pacific Northwest average prices ranged between $69.50 and $72.30/MWh on Sept. 6 as traders anticipated hot midweek weather. Both Seattle and Portland posted new record highs of 88 °F and 96 °F, respectively, on Sept. 11.

With a return to more seasonal temperatures, Northwest peak-power values dropped roughly $35 between Sept. 6 and Sept. 13. Mid-Columbia and California-Oregon Border traded Sept. 13 between $34.15 and $36.30/MWh on average.

Peak demand on the Cal-ISO grid reached 39,743 MW Sept. 9, which should be the current week's high. This week's peak is down substantially from the 42,855 MW peak recorded Sept. 6. Northwest Power Pool demand also grew during the trading period, reaching 54,205 MW on Sept. 11 -- up almost 2,800 MW from the previous week's high.

Off-peak power prices moved lower in Friday-to-Friday trading, with losses of between about $1.35 at Palo Verde and $13.30 at Mid-C. Average nighttime power prices recorded Sept. 13 ranged from $29/MWh at Mid-C to $39.25/MWh at SP15.

Working gas in storage reached 3,253 Bcf as of Sept. 6, according to U.S. Energy Information Administration estimates, a net increase of 65 Bcf from the previous week. Storage levels are now 5 percent less than a year ago and 1.4 percent greater than the five-year average.

Natural gas storage remains on pace to reach 3.8 Tcf by the end of October, according to Barclays analysts.

Natural gas traders are closely watching weather as the end of the storage season approaches. "The coming seasonal slump in demand as summer fades to autumn will mean bigger increases in inventories in coming weeks," noted Enerfax, "and that may make it hard for prices to hold at current levels."

Henry Hub natural gas values shed about 6 cents since last Friday, trading Sept. 13 at $3.60/MMBtu. Southern California Border gas, however, dropped 22 cents to $3.64/MMBtu, while PG&E CityGate was roughly even at $3.96 Sept. 13.

What's ahead: Cooler temperatures are expected across much of the West the week of Sept. 16, according to the National Weather Service. Above-normal temperatures may linger across Southern California and Arizona from Sept. 18 to 26.

During that same period, Northern California should see normal conditions, while the Pacific Northwest may experience below-normal temperatures along with precipitation above seasonal norms [Linda Dailey Paulson].

Archives of the Western Price Survey for the past year are also available online.

The Western Price Survey is excerpted from Energy NewsData's comprehensive regional news services. See for yourself how NewsData reporters put events in an accurate and meaningful context -- request a sample of either or both California Energy Markets and Clearing Up.

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Contact Chris Raphael, editor with questions regarding Price Survey Content.

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