US Western wholesale power prices averaged 71% higher in December than a year ago, the biggest year-on-year jump across the nation, on increased demand from colder weather and higher gas prices, while the natural gas share of the fuel mix slipped.
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California Independent System Operator peakload averaged 28.721 GW in December, up 2.4% year on year, according to CAISO data. Population-weighted temperatures averaged 6% lower than last December leading to 33% more heating-degree days, according to CustomWeather data.
In the Northwest, peakload increased nearly 8% from a year ago, according to Bonneville Power Administration data. Population-weighted temperatures averaged 10% lower than last December leading to 58.5% more heating-degree days, according to CustomWeather data.
Prices across the West reached a three-month high on low temperatures. California trading locations had the highest prices in the West.
NP15 on-peak day-ahead locational marginal prices averaged $65.46/MWh in December, climbing 55.4% year on year, according to CAISO data. SP15 on-peak day-ahead to real-time spread averaged $11.54 in December with on-peak day-ahead averaging $61.53/MWh, up 53% year on year.
In the Northwest, Mid-C on-peak day-ahead jumped 88.1% year on year to average $57.62/MWh in December, according to S&P Global Platts pricing data. Prices spiked to $124.61/MWh on Dec.27, the highest level since summer, as average temperatures dipped to a 59-month low, according to CustomWeather data.
In the Desert Southwest, Palo Verde on-peak day-ahead reached a three-month high of $74.11/MWh on Dec. 27, according to Platts pricing data.
Also helping to drive up power prices, natural gas spot prices at Sumas were up 79.4% year on year to average $5.688/MMBtu in December, after reaching a 10-month high of $10.125/MMBtu on Dec. 23, according to Platts pricing data. Likewise, PG&E city-gates reached a 10-month high of $7.880/MMBtu on Dec. 23, while SoCal city-gates reached a three-month high of $8.925/MMBtu on Dec. 14.
Fuel mix changes
Natural gas-fired generation remained the lead fuel source in December averaging 34.1% of the total fuel mix, despite slipping 3.6 percentage points year on year, according to CAISO data.
Filling in, nuclear generation increased 4 points year on year to average 8.8% of the fuel mix. Pacific Gas and Electric's 1,197-MW Diablo Canyon-2 was offline last December for maintenance.
Wind-powered generation added 2.4 points from a year ago to average 8% of the mix and imports increased 1.2 points to average 30.7%, according to CAISO data.
Total generation averaged 25.788 GW, up 11% from last December.
In BPA's footprint, gas generation was down less than 1% year on year to average 8% of the total December fuel mix, while hydro rose 3.9 points to 79.5% and wind increased 1 point to 6.1%, according to BPA data. A winter storm brought more precipitation to the region and bumped up The Dalles water supply forecast to end the month at 104% of normal for the April-September forecast period, according to Northwest River Forecast Center data
In power forwards, Mid-C on-peak January rolled off the curve at $63.69/MWh, 89.3% higher than where the 2021 package ended, according to Platts data. Prices reached a package high of $115/MWh Dec. 22, 215% above where the 2021 package was a year ago.
On-peak February is currently in the upper $40s/MWh, 88% above it's 2021 counterpart last year at this time, while the March package is in the upper $20s/MWh, 35% higher.
While the six- to 10-day outlook indicated a greater probability for above-normal temperatures through Jan. 14 in most of the West, the three-month outlook shows greater chances for below-normal temperatures, according to the US National Weather Service.