Western Price Survey
September 15, 2017
Cooler temperatures sent Western daytime power prices even lower this week.
Between Sept. 8 and Sept. 15, peak average power values fell between $1.05 and as much as $12. California-Oregon Border peak power lost the most, down $12 to $28/MWh in Friday-to-Friday trading. By the end of the week, prices traded in a range from $23.10/MWh at Mid-Columbia to $32.65/MWh at South of Path 15.
The primary activity for off-peak power in the West occurred at Mid-C and Palo Verde. Those hubs were mixed in trading.
Demand simply isn’t sufficient to lend price support. Power use on the California Independent System Operator grid should be less than 32,000 MW starting Sept. 18, according to the CAISO forecast.
At roughly this time in 2016, prices were in the doldrums until a late-season heat wave sent demand into the 38,000 MW range, bolstering prices.
Working natural gas in storage was 3,311 Bcf as of Sept. 8, according to U.S. Energy Information Administration estimates. This is a net increase of 91 Bcf compared to the previous week.
Natural gas demand dropped 7 percent week over week. The amount of natural gas used for power generation fell 14 percent based on both cooler weather and hurricane-based demand losses, according to the agency.
The amount of utility-scale electricity generation from natural gas in 2017 is forecast to drop roughly 3 percent, according to the EIA’s latest Short-Term Energy Outlook, released Sept. 12. Natural gas used for power generation should drop from an average of 34 percent in 2016 to roughly 31 percent in 2017 thanks to “higher natural gas prices and increased generation from renewables and coal,” EIA said.
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Henry Hub gas spot values added 16 cents to reach $3.04/MMBtu between Sept. 7 and 14.
In Thursday-to-Thursday trading, Western natural gas prices generally saw nominal movement. Alberta gas posted the greatest gains, leaping $1.25 to $1.67/MMBtu. El Paso-Permian, Opal, and Malin natural gas were even at the end of trading.
CAISO demand peaked at 43,506 MW Sept. 11, which should be the week’s high. Northwest Power Pool demand reached 62,317 MW that same day.
Total renewables generation on the CAISO grid during the week reached 14,595 MW Sept. 14. Solar generation reached 9,509 MW that same day, while thermal generation peaked at 21,928 MW Sept. 11.
What’s ahead: Temperatures well below seasonal norms are forecast across the western United States. Rain is expected in some areas, including the Pacific Northwest.
Archives of the Western Price Survey for the past year are also available online.
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