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Western Price Survey

October 19, 2018
FERC: Winter Gas Constraints, Price Volatility Possible in SoCal

Southern California natural gas infrastructure issues will likely affect natural gas and power markets in the region this winter, according to the Federal Energy Regulatory Commission’s Winter 2018-19 Energy Market Assessment, released Oct. 18.

Restricted natural gas flows and outages in Southern California will likely increase the risk of gas and electricity price volatility this winter when natural gas demand peaks, according to the report (see story at [12]).

The warmer, El Niño weather forecast could temper demand, but does not eliminate the possibility that prolonged cold weather could increase short-term natural gas and power demand.

“Winter power system flexibility and cooperation between SoCal Gas and [the California Independent System Operator] should help maintain electric reliability,” the agency said.

Northwest energy prices continue to fluctuate following the Oct. 9 rupture of a natural gas pipeline in British Columbia, which interrupted flows into the western United States.

Enbridge Inc., the owner and operator of the ruptured 36-inch TSouth pipeline near Prince George, said Oct. 18 it expects to bring the line back into service at 80 percent of its normal operating pressure by mid-November. A parallel, 30-inch TSouth line is now operating, although at a reduced pressure.

Alberta natural gas dropped 97 cents between Oct. 11 and Oct. 18, ending at 31 cents/MMBtu.

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In the U.S., natural gas prices were higher in regions that normally receive gas from the Enbridge line, the U.S. Energy Information Administration said in its weekly natural gas report, noting that cold temperatures in the Northwest and the Rockies helped drive prices higher.

Trades of Sumas natural gas resumed Oct. 15 at $4.96/MMBtu, ending at $6.87/MMBtu Oct. 18. PG&E CityGate and Southern California Border gas values increased roughly 40 cents to $3.89/MMBtu and $3.24/MMBtu, respectively, while SoCal CityGate gas gained the most among Western hubs, up $1.46 to $5.02/MMBtu.

Western power prices continued to vary as well. From a $110/MWh high Oct. 11, Columbia-Oregon Border dropped $62.25 to end at $47.75/MWh. Mid-Columbia daytime power fell from $109.20/MWh to $44.60/MWh by Oct. 18, a 59-percent decrease. South of Path 15 daytime power gained $4.60, ending at $44.25/MWh.

Off-peak prices fared similarly, with Northwest hubs down roughly $20; however, Palo Verde nighttime power jumped $10.25 to end at $33.50/MWh.

CAISO demand reached 29,535 MW Oct. 18; the grid operator expects demand to reach 30,692 MW on Oct. 19.

Total renewables on the CAISO grid reached 12,085 MW Oct. 12, supplying roughly 42 percent of demand. –Linda Dailey Paulson.

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

The Western Price Survey is excerpted from NewsData's comprehensive regional news services. See for yourself how NewsData reporters put events in an accurate and meaningful context -- request a sample of either or both California Energy Markets and Clearing Up.

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Contact Mavis Scanlon, editor with questions regarding Price Survey content.

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