Analysis: Mid-C hourly prices trend lower on seasonality, coronavirus impact, gas prices

Mid-Columbia hourly prices are reaching the lowest levels since February as mild weather continues to impact the region, lowering power demand along with stay-home orders from the coronavirus pandemic.

Mid-C on-peak hourly prices fell to $9.53/MWh April 21 as off-peak hourly dropped to $8.75/MWh April 22, the lowest prices since February 8, according to S&P Global Platts assessments.

Mid-C on-peak hourly has averaged nearly $17.50/MWh so far this month, a drop of 27.3% from March, while off-peak has averaged about $16.25/MWh, down 23.7% on the month, according to Platts assessments.

The spread from day-ahead to hourly has widened to $2.78 for off-peak and $1.84 for on-peak this month, the largest since Platts launched the Mid-C hourly assessment in mid-December, according to Platts data.

"Most of this is due to seasonal declines in heating demand," said Morris Greenberg, senior manager of North American power analytics at S&P Global Platts.

SEASONALITY IMPACT

Lower demand from mild shoulder season weather, in addition to stay-home orders related to the coronavirus, have helped pulled down power prices across the country.

Portland temperatures have averaged 53.2 degrees Fahrenheit this month, 1.6 degrees above normal, according to the US National Weather Service.

Bonneville Power Administration peakload has averaged 6,888 MW so far in April, a decrease of almost 11% month on month, but about 4% higher year on year, according to BPA data. Peakload slid to 6,250 MW on April 19, the lowest level since October.

GENERATION MIX

BPA load has averaged 146,713 MWh so far this month, nearly 8% below the month-ago levels, according to BPA.

Hydro-powered generation, the top fuel in the region, has averaged 64.8% of the total fuel mix month to date, down 6.4 percentage points month on month and a drop of 8.8 percentage points year on year, according to BPA data. Meanwhile, thermal-powered generation rose 1.3 percentage points month on month and up 3.4 percentage points year on year to average 11.6% of the mix in April.

Helping to drive the rise in thermal demand are record low gas prices.

GAS PRICES

Sumas spot gas prices have fallen 23.2% year on year to an average of $1.561/MMBtu in April.

Gas prices have tumbled this year on too much supply, coupled with a drop in power demand due to conronavirus market impacts, a contrast from spikes into the $150s/MMBtu that occurred last March from late winter weather.

NEIGHBORING MARKET IMPACT

"Weak demand and prices in California is also a factor," Greenberg said.

Flows out of BPA have averaged 63,342 MWh/d so far in April, down 23% month on month and a drop of 51% year on year, as neighboring regions are also experiencing weak demand as stay-home orders have lowered power demand.

California Independent System Operator peakload fell 7% month on month and decreased more than 10% year on year to average 24,071 MW in April as stay-home orders have closed commercial facilities, the main pull of power energy.

SP15 on-peak real-time locational marginal prices have averaged about $13.25/MWh so far this month, down nearly 50% from March, while on-peak day-ahead has averaged nearly $16.25/MWh, down 33% compared with March average.