Western Price Survey
November 16, 2018
Western natural gas spot prices have been on a roller coaster in recent weeks, but some values exploded into the stratosphere at the end of Thursday-to-Thursday trading. Dear reader, the prices you are about to see are not typos.
Although many hubs gained a dollar or two, Sumas gas values gained $60.56 in Nov. 8 to Nov. 15 trading, ending at $69.46/MMBtu. Other Western natural gas hubs generally moved higher, adding between $1.02 and as much as $12.61 in trading. Southern California CityGate added $12.61 to end at $18.61/MMBtu. Alberta gas proved the exception, down 59 cents to $1.69/MMBtu.
Henry Hub natural gas spot prices added $1.02 in trading, ending at $4.62/MMBtu.
Natural gas futures are being closely watched as the difference between those and spot prices continues shrinking, according to the U.S. Energy Information Administration. The spread between the summer 2018 spot prices and January 2019 futures was 20 cents/MMBtu—the narrowest difference since 2014. In these conditions, said Enerfax, there is “less economic incentive to store natural gas, particularly because of the fees associated with keeping natural gas in storage.”
Futures prices have been trending higher; however, after shooting up Nov. 14, NYMEX natural gas futures dropped roughly 17 percent the next day, according to Enerfax, which characterized it as the biggest drop in 15 years after the greatest gain in 14 years. Such volatility is likely throughout the winter based on low natural gas storage levels.
After being propelled upward by low temperatures, Northwest peak power prices dropped between $1 and $3.35. Mid-Columbia daytime power lost the most, down $3.35, ending at $57.50/MWh. Other regional hubs added between $8.25 and $17.65. North of Path 15 gained the most, jumping $17.65 to $63.10/MWh. By Nov. 15, peak prices ranged from $43/MWh at Palo Verde to $64.70/MWh at South of Path 15. Western off-peak prices generally followed suit, with Palo Verde adding the most value, up $13.25 to $44.75/MWh.
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California Independent System Operator demand reached 29,337 MW Nov. 14, which should be the week’s high. Northwest Power Pool use reached 58,738 MW Nov. 13. Total renewables on the CAISO grid reached 11,518 MW Nov. 11, supplying roughly 44 percent of demand. Solar generation reached 8,529 MW Nov. 9, fulfilling roughly 30 percent of demand.
The grid operator continues closely watching wildfires across the state, particularly as new, smaller ones ignite. Some 230- and 115-kV lines in Los Angeles and Alameda counties were briefly threatened, but these fires were quickly brought under control, according to CAISO spokesman Steven Greenlee.
Three 115-kV lines and one 230-kV line forced out of service as a result of the Camp Fire in Butte County remain off line. The bulk electric system is stable, Greenlee said. –Linda Dailey Paulson
Archives of the Western Price Survey for the past year are also available online.
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