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Western Price Survey

Week's End Edition
October 28, 2011
Western Power Prices Remain Flat

Increasing supplies of natural gas could moderate energy prices into the winter.

Natural gas storage in particular remains robust. Working gas in storage was 3,716 Bcf as of Oct. 21, according to U.S. Energy Information Administration estimates, a net increase of 92 Bcf from the previous week. Stocks were 28 Bcf less than last year at this time but 158 Bcf above the five-year average of 3,558 Bcf.

"Another large build means that storage levels have nearly matched those of last year," the EIA stated in its Oct. 26 weekly natural gas update. Typically, the storage season closes at the end of October or early November. However, if "relatively mild weather and high production levels continue . . . it would not be surprising to see injections continue well into November."

This assessment does not factor in the first snows of the year, which fell in the Rockies and Texas Panhandle -- Amarillo, Texas, posted a record-breaking 2.5 inches Oct. 27. Next week could bring a boost in heating demand reported by the agency. The Northeast, for instance, was expecting a snowstorm on Oct. 29.

Western natural gas prices ended the week slightly higher, spurred by colder weather across the U.S. In the Oct. 21 to Oct. 28 trading period, Southern California Border gas gained 17 cents to $3.58/MMBtu. PG&E CityGate rose 15 cents, finishing at $3.85. Ruby-Malin gas gained 13 cents to end at $3.49/MMBtu, while Malin prices climbed 12 cents, finishing at $3.52. Henry Hub traded for an average of $3.63/MMBtu at the end of the trading period, up 9 cents.

Western peak-power prices posted negligible gains. Here's how average peak-power prices fared over the trading period:

  • Mid-C: Gained about 60 cents to $29.15/MWh.
  • California-Oregon Border: Up 90 cents to roughly $31/MWh.
  • SP15: Up about 95 cents to $34.85/MWh.
  • NP15: Traded only three days over the period, all at around $35/MWh.
  • Palo Verde: Rose roughly 40 cents to $33.85/MWh.

Nighttime average prices at Western hubs generally posted modest gains of no more than a dollar, but SP15 proved the exception with a gain of about $2.50/MWh during the trading period. Average off-peak prices by Friday ranged from roughly $26.10 to $29.95/MWh (see chart).

What's ahead: Seattle expects temperatures to remain in the 50s Monday through Thursday, with dry weather Tuesday and Wednesday. Portland should remain in the mid-50s through the week; dry conditions Monday may turn rainy later in the week. The San Francisco area should be in the 70s throughout the week with mostly clear skies -- mild, warm days and cooler nights -- until Thursday, when there is a slight possibility of rain.

After starting the week with temperatures near 71 °F, the Los Angeles area is forecast to drop to 61 °F Thursday. A weak low-pressure system entering the area sometime Sunday is anticipated to bring cooling to the region [Linda Dailey Paulson].

Western Electricity Prices
Week's End: October 24 - 28, 2011
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 17.60-109.24 13.24-24.69
Mid-Columbia 27-31.50 25-28
COB 30-33 25.25-30
NP 15* 34.50-35.35 26-26.50
SP 15* 32.50-35 24-30.20
Palo Verde 32.75-37.75 24.50-28.75

* 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.

The Western Price Survey is excerpted from Energy 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.

Please contact with questions or comments about this site.

Contact Chris Raphael, editor with questions regarding Price Survey Content.

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