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Western Price Survey

Week's End Edition
September 21, 2012
Western Energy Prices Drop

Western power and natural gas prices ended lower Friday as traders prepared for the end of the month and the advent of fall, when cooling demand typically decreases.

Average prices for peak power in the West lost several dollars compared with last Friday. South of Path 15 led losers, dropping almost $7.70 in the Sept. 14 to Sept. 21 trading period. The hub ended trading Friday at about $37.90/MWh.

Here's how peak prices fared at other Western hubs since last Friday:

  • Mid-Columbia: Lost about $1.85 to around $24.70/MWh.
  • California-Oregon Border: Dropped about $5.10 to $30.45/MWh.
  • North of Path 15: Posted no trades Friday; last traded at roughly $34.85/MWh.
  • Palo Verde: Down about 30 cents to roughly $29.80/MWh.

Off-peak prices also dropped by week's end, with hubs losing between roughly $1.95 and $8 in Friday-to-Friday trading. Off-peak prices at the end of the trading period ranged from $23.80/MWh at Mid-C to $28.75/MWh at SP15.

Peak demand on the Cal-ISO grid reached 38,181 MW on Sept. 20, while demand in the Northwest Power Pool peaked at 50,755 MW on Sept. 17.

Working gas in storage climbed to 3,496 Bcf as of Sept. 14, according to U.S. Energy Information Administration estimates, a net increase of 67 Bcf compared with the previous week. Storage levels are now 10.1 percent higher than a year ago and 8.6 percent above the five-year average.

The storage season closes at the end of October and Barclays revised its end-of-season storage forecast to 3.9 Tcf. Analyst Shiyang Wang said the original storage estimate was roughly 4 Tcf, but it was changed "because of warmer-than-normal weather in September, slightly higher-than-expected coal displacement, lower-than-expected nuclear output, and an unexpectedly large Gulf production loss related to Hurricane Isaac."

Wang added that "this level still suggests that the market will inject only about 478 Bcf between September 7 and the end of the injection season -- about 286 Bcf less than the amount injected during the same period in 2011."

Over the trading period, Henry Hub natural gas dropped 18 cents, trading Friday at $2.76/MMBtu. In the West, Southern California Border gas lost 18 cents to $2.97/MMBtu, while Malin gas dipped 12 cents to $2.71/MMBtu and PG&E CityGate lost 11 cents, ending at $3.28.

Unit No. 2 of the Palo Verde nuclear plant began decreasing its generation this week in preparation for refueling and maintenance. As of Friday, the 1,335 MW unit was operating at 95 percent capacity, according to U.S. Nuclear Regulatory Commission reports. Refueling is slated to begin in early October, said Alan Bunnell, a spokesman for Palo Verde operator Arizona Public Service.

What's ahead: Highs in the mid-60s are expected through Thursday in Seattle, with Portland highs in the 70s. After a 70 °F high Monday, San Francisco should be in the high 60s through Thursday, while Los Angeles anticipates temperatures around 80 °F into Thursday. Inland Southern California areas should be around the 90-degree mark [Linda Dailey Paulson].

Western Electricity Prices
Week's End: September 17 - 21, 2012
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 12.11-864.15 7.67-330.70
Mid-Columbia 22.75-27.75 22.50-25.50
COB 28-35 24.25-28
NP 15* 34.50-35.50 23.50-25.25
SP 15* 37.25-43.25 22.25-29.25
Palo Verde 28.50-33.75 20.70-25.25

* 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.

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

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