Dry air moving across US West, few outages linger; storms boosted hydro supply

A period of dry conditions is moving into California after a string of storms wreaked havoc on the Western US for more than two weeks causing millions of outages from downed trees due to saturated soil, however power prices remain elevated across the region.

High natural gas spot prices from weak storage levels and constraints on supply continue to drive up daily power prices, even as the threat of power outages from repeated windy storms has subsided.

"The next two weeks show a very cold dry pattern for the region which will continue to support prices," S&P Global Commodity Insights analyst Morris Greenberg said.

NP15 on-peak day-ahead was bid at $182/MWh and offered at $184/MWh for Jan. 18 delivery on the Intercontinental Exchange. In comparison, NP15 on-peak day-ahead locational marginal prices have averaged roughly $157/MWh so far this month, 167% higher than a year ago, according to California Independent System Operator data.

Helping drive up power prices, PG&E city-gate traded over $22/MMBtu for Jan. 18 flow on ICE. So far this month, PG&E city-gate has averaged $17.723/MMBtu month to date, 222% higher than a year ago, according to S&P Global Commodity Insights pricing data.

PG&E prices traded at $26.455/MMBtu for Jan. 13 flow, the first time this month that prices surpassed $25/MMBtu.

Weather forecast

"A period of dry conditions will be in place from California eastward through the Great Basin ahead of a Pacific storm system moving into the Pacific Northwest late Tuesday, bringing lower elevation valley/coastal rain and snow to the Cascades," according to the US National Weather Service. "The system will move southeastward into the Great Basin/California during the day Wednesday increasing precipitation chances."

However, both rain and snow accumulations are expected to remain light outside of some heavier snow in the Sierra, according to the weather service.

So far this month, Sacramento has received 7.14 inches of precipitation, which is 5.07 inches above normal, while Redding has received 8.7 inches, 5.55 inches above normal, according to the weather service.

While the long-term drought continues across California, the Great Basin and parts of the Pacific Northwest, the intense precipitation the past few weeks has significantly reduced drought intensity in California, according to the US Drought Monitor's latest summary.

Hydro reservoirs

"The precipitation has provided a generous boost to reservoir stores, but most are still below the long-term average for this time of year," according to the US Drought Monitor summary.

Shasta Dam water supply forecast is currently at 95% of normal for the April-July forecast period, according to the California Nevada River Forecast Center.

However, Shasta's reservoir "is still considerably below the long-term average for this time of year (2.5 million acre-feet) having risen from 57 % of the long-term average to 70%," according to the US Drought Monitor summary.

CAISO hydro-powered generation output Jan. 1-16 averaged about 54 GWh/day, an increase of 55% compared to a year ago, as hydro's market share rose from 6% of the total fuel mix a year ago to 9% so far this month, according to CAISO data.

Power grid impacts

The string of winter storms caused extensive damage throughout the Pacific Gas and Electric system, company spokesman Paul Moreno said, which includes:

• 4,430 conductor (wires)
• 1,818 poles
• 787 cross arms
• 806 transformers
• 1,471 other equipment

PG&E crews restored power to more than 2.8 million customers since the initial storm on New Year's Eve weekend, Moreno said. About 80% of customers had power restored within 12 hours, while more than 90% had power restored within 24 hours.

"The series of storms created fresh outages each storm," Moreno said. "PG&E continues assessing damage and is working to restore remaining customers."

About 7,000 customers remain without power, mainly in the central coast and mountain communities, he said. In the Santa Cruz Mountains, crews continue to encounter access issues due to flooding, downed trees and unstable soil that, in some cases, have led to extended outages for customers.

Most remaining customers are expected to be back online Jan. 17, although some customers will still be without power for a couple more days due to fresh snow and continued access issues for crews, Moreno said.

"There are also some avalanche warnings in areas of the Sierra which further restricts our access," Moreno said. "As weather permits, we will fly to survey and identify damage so we can prepare for restoration in remote areas."

PG&E had as many as 7,200 personnel responding to the storm, including contractors and mutual aid from Oregon, Utah, New Mexico, Washington state and Wisconsin, Moreno said.

Further north, Bonneville Power Administrator spokesman Doug Johnson said there were no impacts of note on the BPA system from the storm as the vast majority of the damage was further south.

"The major storms that hit California the last few weeks did not have the major impacts in our service area that you saw in the rest of California," PacifiCorp spokesman Tom Gauntt said. "We had some serious storms in the last part of December."

The late December storms drove up power prices to 384% higher year over year for Mid-C and 314% higher year over year for NP15, which reached an all-time record high of $524.12/MWh Dec. 22.