Western Price Survey
September 21, 2018
Cooler-than-normal weather across much of California and the Pacific Northwest tamed power demand between Sept. 15 and 20.
After peaking Sept. 14 at 35,073 MW, California Independent System Operator demand dropped 10 percent on Sept. 15 to 31,540 MW. Load is expected to increase as warmer weather arrives in the coming days.
Northwest Power Pool demand peaked at 54,368 MW Sept. 17; however, usage is forecast to reach 55,560 MW Sept. 21.
Dry, warmer weather may ramp up power usage, as a “robust warming trend” is expected to begin Sept. 24 in the greater San Francisco area, according to the National Weather Service. Above-average temperatures may follow as a high-pressure system builds over the Pacific Northwest.
Western peak power prices varied in Sept. 13 to Sept. 20 trading. North of Path 15 daytime power values gained $6.45 to reach $39.35/MWh, while Palo Verde prices fell $4 to $29/MWh.
Off-peak power prices also varied. South of Path 15 gained the most among Western hubs, adding $1 to reach $31.70/MWh, while Palo Verde off-peak power lost $2.75, ending at $22/MWh.
Total renewables on the CAISO grid reached 13,972 MW Sept. 15, satisfying roughly 44 percent of demand. On Sept. 20, thermal generation satisfied roughly 41 percent of demand, while imports fulfilled roughly 33 percent.
Meanwhile, Henry Hub natural gas spot prices added 7 cents to hit $3/MMBtu in Thursday-to-Thursday trading.
Among Western hubs, SoCal CityGate gas values rose 24 cents to $3.95/MMBtu, while El Paso-Permian gas dropped 80 cents to 96 cents/MMBtu.
NYMEX natural gas futures for October increased roughly 7 cents Sept. 20 to $2.97/MMBtu, as reported by Enerfax. The November and December contracts rose roughly 8 cents to $2.96 and $3.03, respectively.
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Increases in natural gas futures prices indicate “that traders may have found the sweet spot in the market, or a balanced area, not too bullish, not too bearish,” Enerfax said in its Sept. 21 newsletter. “There is no question that the winter heating season will begin with a supply deficit. This is helping to underpin the market.”
If natural gas storage addition rates match the five-year average of 10.8 Bcf/d for the remainder of the refill season, there would be 3,230 Bcf of gas in storage by Oct. 31. This is 15 percent less than the five-year average of 3,815 Bcf, according to the U.S. Energy Information Administration.
Working natural gas in storage was 2,722 Bcf as of Sept. 14, according to the EIA, a net increase of 86 Bcf compared with the previous week. –Linda Dailey Paulson.
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