US West power prices rally on winter weather set to impact the region

New York — Power prices soared double digits throughout the West Feb. 11 as frigid arctic air brought winter weather warnings

Power prices throughout the West Feb. 11 reached their highest prices so far in 2021, for Feb. 13 and Feb. 14 delivery, as the US National Weather Service forecast cold arctic air to have widespread impacts throughout the country.

Prices in California climbed double digits: SP15 on-peak jumped about $32.50 to trade around $76/MWh, and NP15 rose about $28.50 to trade at $74.75/MWh.

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Natural gas prices in the region also rose significantly. SoCal city-gates swelled $6.31 to trade at $11.27/MMBtu and Opal Kern River inclined $5.91 to trade at $10.40/MMBtu.

California Independent System Operator hydropower generation slid 6.30% to 21.2 GWh, thermal power saw even bigger declines, down 15.4% to 204.4 GWh, further placing upward pressure on prices already impacted by temperatures.

Northwest surges on significant temperature dips

Northwest prices were also heavily impacted by temperatures as temperatures were set to the teens and 20s Fahrenheit, wind chills in certain areas were forecast to be as cold as -10 to -20.

Mid-Columbia on-peak rose about $30.75 to trade around $69.50/MWh, and the off-peak package followed closely, up about $22.75 to trade around $55.75/MWh. On-peak prices have not reached similar levels since August 2020, when prices reached triple digits in reaction to a heatwave that affected the West.

Prices month to date have averaged about $28.75/MWh, 25.1% above last month around the same time when prices averaged around $23/MWh.

Wind generation in the Bonneville Power administration tumbled 37.8% to 1.7 GWh, also backing the rise in prices.

Southwest spikes on cold trend

Southwest prices saw even bigger spikes, as Palo Verde soared about $54.75 to trade around $84.50/MWh and Mead 230 spiked $61.75 to trade at $93.50/MWh.

The weather service forecast a potentially significant winter weather system to impact parts of the region through Feb. 14 with accumulating mountain snow possible.

Phoenix and Las Vegas temperatures were forecast about 5 degrees below average to the low to mid 60s Fahrenheit, while Salt Lake City was forecast down about 17 degrees to the high 20s F for Feb. 14, according to CustomWeather.

Overall, month-to-date average prices for Palo are 95.7% higher than last February around the same time, from an average of $16/MWh to around $31.50/MWh.