US POWER TRACKER: California prices ease on hydro supply, Northwest prices rise

In a reversal from past years, California power forwards are trending lower on a healthy supply of hydro generation expected this summer, while Pacific Northwest forwards continue to climb to nearly double year-ago levels.

California Independent System Operator peakload was down nearly 17% year on year in June, averaging 28.4 GW, but was up about 5% month on month. Summer made its first appearance with a heat wave at the end of June, which brought the highest load since last year's record setting demand in early September.

The Western US has a greater probability of above-normal temperatures going forward this season, according to the 6-10-day and three-month outlooks from the National Weather Service's Climate Prediction Center.

Northwest prices on the rise

Mid-C on-peak July rolled off the curve at $144.95/MWh, 130% higher than where the 2022 package ended, according to data from Platts, a division of S&P Global Commodity Insights. On-peak August is currently in the low $200/MWh, 68% above where its 2022 counterpart was a year ago, while September is in the low $170s/MWh, 70% higher.

That trend was mirrored in the spot market, where Mid-C on-peak day-ahead averaged $48.97/MWh in June, a jump of 146% month on month and up 38.5% year on year, according to pricing data from Platts.

Driving up prices, hydro-powered generation sank nearly 14 percentage points from May to average around 77% of the total fuel mix in June, down nearly 10 points year on year, according to Bonneville Power Administration data. Filling in the gap from less hydro, thermal generation rose 6.2 points year on year to 7.4% of the June fuel mix, as wind generation increased 5.7 points from a year ago to over 11% of the fuel mix.

California prices dropping

Hydro output climbed 82% year on year to average 86.717 GWh in June, helping hydro's market share to increase 7.5 point from a year ago to average 14.4% of the total fuel mix for the month, according to CAISO data.

More hydro meant less need for thermal generation and output dropped 24% year on year to average 158.736 GWh in June, according to CAISO data. That caused thermal's market share to decrease 3.4 points from a year ago to average 26.3% of the fuel mix for June.

Even so, thermal regained its spot as the lead fuel source in June after solar soared into the top spot in May. Solar-powered generation rose nearly 4 points year on year to make up 25.3% of the June fuel mix.

Gas generators supplied 158.736 GWh/d in June, according to CAISO data, and S&P Global data showed the gas power burn was 0.952 Bcf/d, up 54% from May, but down 36.34% from 2022. S&P Global analysts expect CAISO's gas-fired generation to fall to an average of roughly 291.144 GWh/d in August, and burn 1,688 MMcf/d, assuming heat rates similar to August 2022.

With more hydro in CAISO, imports dropped 12.2 points compared to a year ago, to average 6.3% of the total fuel mix.

Shasta Dam is currently at 92% capacity as the storage level at the dam has climbed 138% from a year ago, according to the California Department of Water Resources.

Southwest prices mixed

Palo Verde on-peak day-ahead averaged $35.42/MWh in June, up 25.2% month on month, but down 55.8% year on year, according to pricing data from Platts.

In power forwards, Palo Verde on-peak August is currently in the low $190s/MWh, 3.4% higher than its 2022 counterpart a year ago, after averaging 13.2% lower last month, according to Platts data. Meanwhile, the on-peak September package is in the mid-$160s/MWh, 25% higher than the 2022 package last year, climbing from an average of 5.4% higher in June.

The on-peak balance-of-the-month package has averaged about $138.25/MWh so far this month, double the same time a month ago.