Western Price Survey
Week's End Edition
A late-season heat wave prompted a temporary spike in Western electricity prices and demand early in the week, but by Friday prices had retreated.
In the Friday-to-Friday trading period spanning Sept. 24 to Oct. 1, average prices for daytime power across the West dropped between about $6.60 and slightly more than $15.
Areas of California and the Southwestern United States experienced two days of 100-plus-degree heat early in the week, prompting generators to seek natural gas supplies from Rocky Mountain states to meet demand, according to the U.S. Energy Information Administration.
Peak demand on the Cal-ISO grid reached 45,629 MW Monday at 5 p.m., which Cal-ISO spokesman Gregg Fishman said fell well below the all-time peak record of 50,270 MW set July 24, 2006. Demand might have exceeded that figure, however, if not for a small fire that erupted Monday east of Redding, Calif. under two of the three California-Oregon Intertie lines. Fishman said the grid operator called on Southern California Edison and emergency interruptible programs to help reduce electricity demand Monday afternoon. Transmission flows were restored at about 6 p.m.
For the six-day trading period, South of Path 15 average peak power prices dropped more than $15 to close at $39.03/MWh, while North of Path 15 lost about $12, closing Friday at $39/MWh for daytime average power. SP15 recorded the week's high spot price among Western hubs at $50/MWh.
Mid-Columbia posted an average price of $29.50/MWh for daytime power Friday. The hub's value eroded $14.54/MWh during the trading period.
Meanwhile, California-Oregon Border daytime power traded for an average of $33.25/MWh Friday, losing $9.76/MWh versus the previous Friday.
Over the six trading days ending Oct. 1, Palo Verde peak power lost about $6.60/MWh, trading for an average of $36.16 Friday.
For off-peak power, most Western hubs lost value by week's end, with average prices for nighttime power down between about $2.60 and $6.66/MWh (see chart).
According to the U.S. Energy Information Administration, a 74 Bcf addition to natural gas reserves provided a total of 3.414 Tcf in storage as of Sept. 24. This addition was 9 Bcf more than the 65 Bcf injection last year at this time. Storage is now 202 Bcf greater than the five-year average, according to the agency.
Henry Hub spot prices traded at $3.81/MMBtu on Wednesday, Sept. 29, down 21 cents from the previous Wednesday. By Friday, the average price was $3.67/MMBtu. Futures contracts for October expired Sept. 28 at $3.84, up 3 cents compared to the price at the start of the contract-trading period Aug. 30. November futures traded for $3.96/MMBtu Sept. 29, down 13 cents from the previous Wednesday's price.
What's ahead: A weather system expected over the western United States has many meteorologists uncertain about their long-term forecasts. The Pacific Northwest should have seasonable fall weather, with light rain possible in the Seattle area Monday and/or Tuesday. The Portland area may have low clouds and above-normal temperatures Wednesday through at least Friday. The National Weather Service speculates Northern California may experience mild weather throughout the week [Linda Dailey Paulson].
* 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.
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