Western Price Survey
September 28, 2018
Southern California natural gas prices are being driven lower by high Southern California Gas Co. inventories, which are nearing their maximum allowable level, according to the U.S. Energy Information Administration.
The utility issued a critical notice Sept. 25 stating that 45 MMcf/d of capacity will be available for potential storage during the remainder of September. Starting Oct. 1, the injection capacity will be 65 MMcf/d, but all of that is earmarked for system balancing.
SoCal Gas had a total of 80.6 Bcf of natural gas in storage as of Sept. 27, according to data on ENVOY, the utility’s electronic information bulletin board. The system’s capacity is 83 Bcf. Aliso Canyon reached its maximum allowable capacity of 34 Bcf Sept. 24, according to the EIA, and Honor Rancho, a northern Los Angeles County storage field, is forecast to reach its capacity of roughly 27 Bcf by Oct. 1.
Western natural gas prices responded, with SoCal CityGate gas falling 30 cents to $3.65/MMBtu in Sept. 20 to Sept. 27 trading. Alberta gas increased the most among hubs, up 61 cents to $1.66/MMBtu. Henry Hub natural gas spot prices added 7 cents to reach $3.07/MMBtu in Thursday-to-Thursday trading.
California Independent System Operator demand peaked at 35,874 MW Sept. 27, which should be the week’s high. Northwest Power Pool demand peaked at 55,217 MW Sept. 27; however, use was forecast to reach 56,746 MW Sept. 28.
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Total renewables on the CAISO grid reached 12,471 MW Sept. 24, supplying roughly 38 percent of demand. Solar generation peaked at 9,756 MW Sept. 21. On Sept. 26, thermal generation reached 15,850 MW, fulfilling roughly 45 percent of demand.
Western peak power prices generally gained value between Sept. 20 and Sept. 27. Mid-Columbia daytime power added the most, up $4.25 to $31.30/MWh. South of Path 15 proved the exception, shedding $1.10 to $42.10/MWh. Prices Sept. 27 ranged from $30/MWh at Palo Verde to $42.10/MWh at SP15.
California-Oregon Border nighttime power added $6.25 to reach $30.50/MWh—a 26-percent gain. Both North and South of Path 15 values eroded less than a dollar. By Sept. 27, nighttime values ranged from $23.50/MWh at Palo Verde to $31.45/MWh at SP15.
Summer wholesale Western power prices reached their highest levels since 2008, according to an EIA analysis. The average peak power price during July in the CAISO region was $101/MWh, “the highest monthly average since the current day-ahead market began trading in April 2009.” The coincident hourly load for the Western Interconnection reached 139.4 GW July 24, “the highest level since EIA began compiling this data in mid-2015.”
Archives of the Western Price Survey for the past year are also available online.
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