Western Price Survey
September 20, 2013
The California Independent System Operator is in the middle of a difficult operating period, with fires and wind threatening transmission lines.
"Peak load conditions and Santa Ana winds are common in September in Southern California, and it is usually one of the most challenging operating periods," stated Steve Berberich, Cal-ISO's chief executive officer, in a Sept. 12 report.
Despite mild weather conditions keeping power demand tame, fires and dry conditions are a continued concern, Berberich said. "We have had several transmission line de-rates and outages due to fires burning near transmission lines, most recently during the week of August 26 when the Deer Fire caused significant de-rates of the California-Oregon intertie."
Nevertheless, this week was relatively tame for prices. Average California peak values ended the week above the $40/MWh mark, with South of Path 15 down $2.25 between Sept. 13 and 20, trading Friday at $46.65/MWh. Northwest hubs continued dropping, with Mid-Columbia losing almost $7 to $27.20/MWh in the Sept. 13 to Sept. 20 trading period.
Peak demand on the Cal-ISO grid reached 39,159 MW Sept. 16, which should prove the week's high. Last week's peak was 39,743 MW. In notable power-production events, wind generation in the Bonneville Power Administration area was nearly on par with that of hydropower, and exceeded thermal output, during off-peak hours on Sept. 17. On the same day, total renewables production in Cal-ISO territory also briefly exceeded that of imports (see "Power Gauge" on following page).
Working gas in storage reached 3,299 Bcf as of Friday, Sept. 13, according to U.S. Energy Information Administration estimates, a net increase of 46 Bcf from the previous week. Storage levels are now 5.4 percent less than a year ago and 0.5 percent greater than the five-year average.
Henry Hub natural gas values gained 7 cents since last Friday, trading Sept. 20 at $3.68/MMBtu. Western natural gas prices followed suit, with Southern California Border gas adding 9 cents to $3.73/MMBtu while PG&E CityGate rose 7 cents, trading at $4.04 today.
The week's natural gas price gains were attributed to a combination of "temporary supply disruptions and a lower-than-consensus storage injection," according to a weekly report from Barclays analysts. The disruptions were caused by flooding in Colorado plus heavy well and pipeline maintenance nationwide.
What's ahead: The National Weather Service forecasts an increased probability of below-normal temperatures throughout the West from Sept. 25 through 29 [Linda Dailey Paulson].
Archives of the Western Price Survey for the past year are also available online.
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