Western Price Survey
October 3, 2014
Western energy prices rose this week as California got a blast of hot weather. High temperatures reached 100 °F in Los Angeles late in the week, the mid-90s in Santa Cruz, and 84 °F in San Francisco, prompting the National Weather Service to issue a heat advisory for some areas in the state.
To meet higher demand on the grid, Cal-ISO ramped up thermal generation (see "Power Gauge," next page). Solar production, meanwhile, peaked at 4,875 MW Sept. 29, which surpasses the current record peak of 4,810 MW recorded Sept. 1.
South of Path 15 average peak power prices added $8 to $56.50/MWh in the Sept. 26 to Oct. 3 trading period. Hubs gained between $1.90 and $8, with average peak prices ranging from $36.25/MWh at Mid-Columbia to $56.50 at SP15.
Off-peak prices also rose a couple of dollars during the trading period. Average off-peak values on Friday ranged from $34.20 at Mid-C to $45.50 at SP15.
The slight uptick in power prices came despite additions to natural gas storage. Working gas in storage reached 3,100 Bcf as of Sept. 26, according to U.S. Energy Information Administration estimates, a net increase of 112 Bcf from the previous week. Storage levels are now 10.7 percent less than a year ago and 11.4 percent less than the five-year average. The agency is sticking with its forecast that the working natural gas inventory should be 3,477 Bcf by Oct. 31.
"The storage injection set a record for September and was the [twelfth] largest weekly addition in all of EIA's records, which date to 1994," stated Enerfax in its Friday report. It was the largest addition since May. Traders expect more than 3.5 Tcf in storage before winter, Enerfax noted.
In their weekly commodities report, Barclays analysts said gas production should continue unabated. "While we continue to forecast the end-of-October storage level as the end of the season, injections should push into November," the analysts said, "presenting upside risks to 3.5 Tcf being the peak storage level this year."
Henry Hub natural gas spot values jumped 12 cents since last Thursday to trade Oct. 2 at $4/MMBtu. Western natural gas prices added as much as 6 cents in Thursday-to-Thursday trading. Opal/Kern led gainers, up 6 cents to $3.79/MMBtu.
Natural gas prices as a whole were higher in September compared with September 2013. Hubs, however, remain below the five-year average. For power, average prices in September were much tighter than last year, when high average prices neared $70/MWh -- the result of an early-month heat wave (see "Price Trends," next page) [Linda Dailey Paulson].
Archives of the Western Price Survey for the past year are also available online.
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