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Western Price Survey

Week's End Edition
September 16, 2011
Power Prices Remain Sluggish

Low electricity demand and falling natural gas prices have provided little support for Western power prices.

Working gas in storage was 3,112 Bcf as of Friday, Sept. 9, a net increase of 87 Bcf compared with the previous week, according to U.S. Energy Information Administration estimates. Stocks were 140 Bcf less than last year at this time and 52 Bcf below the five-year average of 3,164 Bcf.

The EIA reports that natural gas consumption nationwide saw a "modest decline" with abundant supplies bolstered by Canadian imports.

Western natural gas values dropped in the Sept. 9-16 trading period. Southern California Border natural gas fell 21 cents to $4/MMBtu. PG&E CityGate traded for $4.19/MMBtu, a loss of 12 cents over the trading period. Malin and Ruby-Malin gas each lost a couple of cents, trading at around $3.80/MMBtu.

Meanwhile, Cal-ISO peak demand fell throughout the week, hitting around 32,000 MW on Friday. Northwest Power Pool demand also slipped during the week (see chart).

Here's how average peak-power prices fared over the trading period:

  • Mid-C: Up 40 cents to $33.95/MWh.
  • California-Oregon Border: Gained 15 cents to about $40.60/MWh.
  • NP15: Posted no trades Friday; traded for $35.25/MWh Sept. 15.
  • SP15: Down about $1 to around $40.70/MWh.
  • Palo Verde: Lost $3.25 to $38.25/MWh.

Off-peak power lost value over the trading period, with several Western hubs posting losses between 70 cents and about $6.20 by Friday. Mid-C posted a gain of $1.60, ending trading at almost $31.10/MWh Friday. NP15 was up as well, but only by 50 cents. Nighttime average prices ranged from about $26.60/MWh to almost $32.30/MWh (see chart).

Peak demand on the Cal-ISO grid was 36,399 MW Tuesday, which should prove the week's high. Demand should remain less than 40,400 MW in the week ahead, according to the grid operator. Average peak prices in the West at this time last year remained around $40/MWh with demand of 34,123 MW. Five years ago peak prices reached above the $60/MWh mark at some hubs, such as SP15, and natural gas prices easily cleared $5/MMBtu at most hubs.

What's ahead: Seattle starts the week of Sept. 19 with dry weather, but an upper-level system may bring precipitation to the region. Portland should have temperatures in the upper 70s, though there may be wet storms by midweek, depending on how the system unfolds and is influenced by neighboring weather patterns. There is some debate about the accuracy of the precipitation forecast for Seattle and Portland, however.

San Francisco expects sunny skies and temperatures in the 70s, according to forecasts. Warmer conditions should prevail inland. Los Angeles should be fair and warm with valley temperatures in the 90s. Little temperature variation is anticipated in the city -- expected to remain around 78 °F -- with sunny skies into Thursday [Linda Dailey Paulson].

Western Electricity Prices
Week's End: September 12-16, 2011
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 23.59 -169.21 17.15 -41.47
Mid-Columbia 28.75 -34.75 23.50 -32.25
COB 34-41.75 26-33.25
NP 15* 36.25-37 26.50-30.50
SP 15* 35.50-42.25 25.50-30.25
Palo Verde 34-40 22-27.25

* 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.

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.

Please contact with questions or comments about this site.

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

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