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Western Price Survey

December 1, 2017
SoCal Natural Gas Prices Up on Added System Constraints

Continuing restrictions at Southern California Gas Co.’s Aliso Canyon gas-storage facility coupled with natural gas pipeline outages are sending Southern California gas prices higher and causing analysts to question whether customers in the region can be reliably served.

Southern California CityGate natural gas earmarked for delivery during the Thanksgiving holiday was priced at $3.07/MMBtu, on average, according to Enerfax. By Nov. 30, the hub ended at $5.92/MMBtu, up 88 cents from Nov. 28.

Futures for the hub increased from $5.64/MMBtu to $6.20/MMBtu early in the week after a forced outage was posted on the Mojave Pipeline, according to Energy GPS analysts, who said the natural gas scheduled on the system is now 2.45 Bcf compared with 3.55 Bcf “when healthy.”

“The storage limitations, pipeline outages and transmission restrictions have the market questioning the ability of SoCal Gas and the California Public Utilities Commission to reliably serve the customers on its system,” Energy GPS said (see story at [13]).

Working natural gas in storage in the U.S. was 3,693 Bcf as of Nov. 24, according to U.S. Energy Information Administration estimates. This is a net decrease of 33 Bcf compared to the previous week.

Total national natural gas use decreased 6 percent week over week, according to the EIA. Natural gas used for power generation declined 5 percent week over week.

Henry Hub gas spot values added 3 cents to reach $2.94/MMBtu between Nov. 28 and Nov. 30.

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In Tuesday-to-Thursday trading, Western prices generally lost between 3 and 14 cents. The exceptions were Opal natural gas, which ticked up 3 cents to $2.65/MMBtu, and Southern California Border gas, which jumped 21 cents to $2.94/MMBtu by Nov. 30. Markets were closed for the Thanksgiving holiday.

Western daytime power prices generally gained between 75 cents and $3.45 in the Monday-to-Friday trading period. California-Oregon Border peak power was the exception, shedding 15 cents to $28.65/MWh. By Dec. 1, prices ranged from $24.45 at Mid-Columbia to $49.05/MWh at South of Path 15. Off-peak prices eroded between 80 cents and $1.40. COB lost the most, down $1.40 to $22/MWh. There were few or no trades at the North of Path 15 and South of Path 15 hubs.

In November, average natural gas prices were lower compared with 2016 (see “Price Trends,” next page). The average high price at Henry Hub was $3.18/MMBtu, 11 cents less than in 2016.

Western natural gas prices were between 8 cents and as much as 31 cents lower year over year; however, average high prices in the region remained above the $3 mark for the month.

Average Western power prices in November were between $12 and as much as $28 greater than the average prices recorded in 2016. –Linda Dailey Paulson.

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.

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

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