Western Price Survey
September 27, 2013
Solar production in Cal-ISO reached a new record this week, hitting 2,854 MW on Sept. 26.
Total renewable-energy output in Cal-ISO territory, which peaked just shy of 8,000 MW this week, is now outpacing imports during some hours. At 11 a.m. on Sept. 26, for instance, renewable power was producing 7,964 MW, well ahead of imports and just behind thermal power at 10,151 MW (see "Power Gauge," next page).
Meanwhile, tepid demand across the United States and the West sent both natural gas and power prices lower throughout the week. Demand is expected to remain relatively flat in the near term as conditions should remain mild.
Under normal market conditions, things like maintenance or problems that cause disruptions such as the recent flooding in Colorado would tighten the natural gas market. "However, shoulder season demand due to mild weather appears to be even weaker than production," noted Barclays analysts in a weekly report.
Working gas in storage reached 3,386 Bcf as of Friday, Sept. 20, according to Energy Information Administration estimates, a net increase of 87 Bcf from the previous week. Storage levels are now 5 percent less than a year ago and 0.9 percent greater than the five-year average.
This addition was greater than traders anticipated, Enerfax noted. "The large build comes as a recent bout of mild weather curbs demand. Weather forecasters continue to call for mild weather in the weeks ahead, likely continuing to reduce demand."
Henry Hub natural gas values fell 18 cents since last Friday, trading Sept. 27 at $3.50/MMBtu. Over the Friday-to-Friday trading period, Western prices saw even greater losses: Southern California Border natural gas fell 31 cents to $3.41, Malin dropped 23 cents to $3.32 and PG&E CityGate fell 20 cents to $3.83/MMBtu.
Mild weather also meant less electricity demand. Peak demand on the Cal-ISO grid fell by roughly 5,645 MW from last week's high to 33,515 MW Sept. 23, according to the grid operator. Northwest Power Pool demand, at 47,819 MW on Sept. 24, was about 2,640 MW less than the previous week.
Meanwhile, Western peak-power prices fell about $3/MWh in the Sept. 20 to Sept. 27 trading period. South of Path 15 was the only Western hub that managed to end the week above the $40 mark, trading Sept. 27 at $43.15/MWh (see chart).
What's ahead: The National Weather Service forecasts mostly seasonally normal temperatures for the West Coast between Oct. 2 and 6, save for Northern California, which expects above-normal temperatures during the period [Linda Dailey Paulson].
Archives of the Western Price Survey for the past year are also available online.
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