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Power dailies biased lower with load but boosted by rebounding gas

Q2: U.S. Solar and Wind Power by the Numbers

Essential Energy Insights - September 17, 2020

Essential Energy Insights September 2020

Rate case activity slips, COVID-19 proceedings remain at the forefront in August


Power dailies biased lower with load but boosted by rebounding gas

Next-day power values across the U.S. spent theWednesday, April 27, session mixed to predominantly lower, with losses at somehubs driven by mostly weaker demand projections but with support derived from arecovery in spot natural gas markets.

After regainingsome ground prior to the April 27 open, the front-month May naturalgas futures contract reversed the uptick and lost 3.7 cents to roll off theboard at $1.995/MMBtu. Not far behind, the upcoming front-month June contract closedthe day down 0.6 cent to settle at $2.153/MMBtu. Despite losses in the futuresarena, most spot natural gas markets across the country saw gains.

In other supply, total U.S. nuclear plant availabilitysaw a small increase early April 27 to 83.50%, up from 83.41% on April 26 andstill higher than the 82.19% level noted on the same day a year ago.

Eastdailies jumbled with choppy load and varied gas

Next-day power prices in the East were mixedWednesday, as dailies reflected forecasts calling for varied Thursday demandand diverging spot natural gas prices.

In the Northeast, power at NEPOOL-Mass was traded in arange spanning the low $30s, for a daily increase of less than a dollar, whilevalues at New York Zone G gained about a dollar from Tuesday with deals heardin the high $20s and low $30s. In the Mid-Atlantic, PJM West ran counter tostronger load forecasts and dropped $2 on the session, with transactions peggedin the mid-to high $20s.

Day-ahead markets in the Northeast favored thedownside, with trades at NEPOOL-Mass and New York Zone G slipping by $1 to $2to average $32.30 and $28.02, respectively, while DAM deals at New York Zone Jfell by about $5 to average $30.69. Running against the wider decline were DAMtransactions at New York Zone A, which posted a daily gain of roughly a dollarto average $23.98.

Regional spot gas markets moved in differentdirections, with gas deals at TETCO-M3 losing roughly 2 cents from Tuesday toaverage below $1.40/MMBtu, while trades at Transco Zone 6 New York amassedroughly 5 cents on the session to rise to an average greater than $1.45/MMBtu.

Load forecasts in the Northeast and the Mid-Atlanticsuggest varied load for the latter part of the workweek. Peak Thursday demandin New England could reach 14,350 MW, up little more than 30 MW from Wednesday,while load in New York should top out at 17,550 MW on Thursday, down by about400 MW from the midweek.

The PJM Mid-Atlantic region expects peak Thursdaydemand to touch 30,407 MW, shedding a scant 40 MW from Wednesday, while the PJMWestern region may see Thursday demand crest at 46,529 MW, increasing byroughly 400 MW from the day prior.

Westmarkets see losses despite load and gas support

Trading activity in western U.S. leaned flat to lowerWednesday, as some markets were unimpressed by outlooks suggesting strongerThursday demand and support from mostly higher spot natural gas prices.

Power values in the Northwest leaned flat to lower,with on-peak deals at Mid-Columbia done in the low to mid-teens, for a dailyloss of about a dollar, while trades at COB added less than a dollar and wereheard in the mid- to high teens.

Power markets in the Southwest followed suit, withPalo Verde gaining less than a dollar in the high teens, while transactions atMead dropped by roughly a dollar from Tuesday in the high teens as well.Dailies in California faltered. with power at South Path-15 noting a decline ofmore than a dollar from Tuesday with trades quoted in the mid-teens.

Spot natural gas markets in the West were mixed topredominantly higher with gas deals at Malin and SoCal Border adding about 1cent to 2 cents from Tuesday to rise to averages close to $1.75/MMBtu and above$1.85/MMBtu, respectively, while trades at PG&E Citygates defied the trendand tumbled by around 2 cents to average below $2.05/MMBtu.

The California ISO forecasts that load may see a highat 28,430 MW on Thursday, rising by more than 300 MW from Wednesday.

Lossesat ERCOT markets contained by recovering gas prices

Dailies in Texas took a few steps back Wednesday, aslosses were fueled by expectations for sluggish Thursday load. Losses werecontained though by flat to higher spot natural gas prices.

Next-day trading activity at ERCOT North for Thursdaydelivery was quoted in the mid-$20s, for a daily loss of around $5.

DAMs returned the prior-day's gains, with most hubsfalling by more than $10 from Tuesday to post averages of $26.26 at ERCOTHouston, $22.11 at ERCOT North, $22.86 at ERCOT South and $14.45 at ERCOT West.

The ERCOT grid operator anticipates peak Thursdaydemand to run up to 49,256 MW, slipping by more than 600 MW from Wednesday'sprojected high.

Supporting power market gains was a bias higher byspot natural gas prices. Gas deals at El Paso Permian added close to 4 centsfrom Tuesday to average above $1.70/MMBtu, while trades at the Henry Hub weresteady to Tuesday and retained an average above $1.85/MMBtu.

Midwestmarkets pressured by conflicting fundamentals

Power packages in the central U.S. saw some divergingcues Wednesday coming from forecasts calling for slack Thursday load but withsupport from a recovery in spot natural gas markets.

Demand forecasts around PJM regions in the centralU.S. are aimed lower, with the PJM AEP region expecting load to peak at 14,627MW on Thursday, tumbling by more than 300 MW from Wednesday. Demand in the PJMComEd region may see a high at 11,076 MW on Thursday, down by about 100 MW fromthe midweek.

Spot gas markets in the region rebounded, with gainsof around 2 cents noted at Chicago Citygates and NNG Demarc to averages above$1.90/MMBtu and $1.85/MMBtu, respectively.

Market prices and included industry data are currentas of the time of publication and are subject to change. For more detailedmarket data, including power, naturalgas and coal indexprices, as well as forwards and futures,visit our Commodities Pages.