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Western Price Survey

October 14, 2016
EIA Expects Warmer Western Winter

The U.S. Energy Information Administration expects temperatures in the western U.S. this winter to be about 2 percent warmer than last winter, according to the agency’s annual Winter Fuels Outlook, issued Oct. 13. The West could see 1.7 fewer heating degree days, although colder-than-normal conditions are expected in other areas, including the South.

Natural gas use in the West is forecast to be 45.2 Mcf this winter, a decrease of 1.3 percent. The EIA expects prices of $10.54/Mcf, up 6.5 percent, which is on a par with 2014-2015 prices. The national average retail price should be $10.37/Mcf; last winter it was $9.90/Mcf, according to the EIA.

Working natural gas in storage was 3,759 Bcf as of Oct. 7, according to EIA estimates. This is a net increase of 79 Bcf compared to the previous week. Storage levels are now 1.5 percent greater than a year ago and 5.4 percent greater than the five-year average.

Henry Hub gas spot values jumped 17 cents in Thursday-to-Thursday trading, ending at $3.16/MMBtu Oct. 6.

Western natural gas values, however, eroded between 6 and 15 cents in trading. Sumas was the exception, still at $2.61/MMBtu. PG&E CityGate lost the most, down 15 cents to $3.27/MMBtu.

Meanwhile, Western peak power prices tumbled between $3.10 and as much as $8.55 between Oct. 7 and 14. South of Path 15 lost the most, down $8.55 to $32.20/MWh. Prices ranged from $21.50 at Mid-Columbia to $32.20/MWh at SP15.

Average nighttime power prices fell, with both Pacific Northwest hubs losing $6.75 by Oct. 14. They recovered nominally after a $10 to $11 drop between Oct. 12 and 13. Prices ranged from $15.55/MWh at Mid-C to $28.65/MWh at SP15.

The Pacific DC Intertie has been derated and is not expected to return to service until Oct. 30. The Bonneville Power Administration did not respond to requests for comment by press time; however, CAISO says the outage is due to routine maintenance.

“This is the season for planned outages and we are seeing more congestion on the system, but this happens every year,” said Steven Greenlee, a CAISO spokesperson. “We are managing the system accordingly and there is no threat to reliability.”

Demand peaked on the CAISO grid at 32,424 MW Oct. 10, with thermal generation peaking at 16,332 MW Oct. 11. Northwest Power Pool use reached 52,814 MW Oct. 13 [Linda Dailey Paulson].

Archives of the Western Price Survey for the past year are also available online.

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