Western Price Survey
September 29, 2017
The first week of fall tamed energy prices in the Northwest, but temperatures ramped up toward 90 degrees in parts of Southern California and power prices picked up there. Gas prices couldn’t hold up anywhere, drifting lower at hubs in the West and across the country. Negative natural gas spot prices in western Canada have more to do with ongoing pipeline constraints than with weather or other demand issues.
Injections of 58 Bcf of gas into storage brought U.S. working totals to 3,466 Bcf, narrowing the gap from the five-year maximum for this period of 3,593 Bcf set last year. The Mist natural gas storage facility in northwest Oregon has reached inventory levels higher than last year’s at this time, 92 percent of the all-time maximum inventory level of 16,880,757 dekatherms, which it reached by Oct. 15 and held until withdrawals began a month later.
Power prices diverged north and south, with flagging values in the Northwest as balmy weather made life great again, but Mid-Columbia low peak prices dipped below $20/MWh to $19 in trades Sept. 28. California hubs also sagged by week’s end, but spent most of the week above last week’s levels. Trades Sept. 29 to cover the weekend rose across hubs we monitor, especially in the Northwest.
The 20-degree difference experienced in many locations between highs Sept. 28—the last day above 80 degrees likely to occur for many months west of the Cascades—and Sept. 29 may mark the first hurrah of the heating season in the Northwest. The National Weather Service issued a Special Weather Statement for most of western Washington advising those planning to hike or camp this weekend that “warm sunny weather will come to an abrupt end” and to expect wet cold weather, as offshore air flow gives way to a system approach from the Pacific.
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Meanwhile, Southern Californians are warned of elevated fire danger through Sept. 29, as offshore flow there lasts just a bit longer, before daily high temperatures settle into the predicted 70s the first week of October. Demand on the California Independent System Operator grid fell short of expected highs in late September, with the peak demand reaching 34,741 MW on Sept. 27.
What’s ahead: CAISO daily peak demand forecast for Sept. 29 is 19 percent above the Sept. 22 forecast.
Cooler weather in population centers in both the Southwest and Northwest may show why these are called shoulder months, with limited weather pressure to move the needle. The Climate Prediction Center’s short-term outlooks suggest a high likelihood of colder-than-normal temperatures through Oct. 12 around the West, except in coastal Southern California. –Alan Mountjoy-Venning.
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