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Daily power prices firm as gas gains offset mixed load forecasts

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


Daily power prices firm as gas gains offset mixed load forecasts

Higher spot natural gas prices countered varied Thursday load forecasts and helped support next-day power markets across the U.S. on Wednesday, Oct. 4.

At the natural gas futures market, oversold conditions provided a leeway for technical buying to boost the front-month November contract 4.5 cents higher to settle at $2.940/MMBtu. In tandem, major spot gas markets edged higher and gave a boost to power dailies.

The National Weather Service said that while a strong weather system is keeping temperatures cooler than normal in the western U.S., "a strong cold front will focus heavy rain and associated potential for flooding in portions of the central and southern Plains."

Following the loss of NextEra Energy Inc.'s Turkey Point 4 for a refueling outage, total U.S. nuclear plant availability slipped to 90.84% early Oct. 4.

East values notch gains with fundamental backing

Power prices in the East spent the midweek session in positive territory backed by mostly elevated load forecasts and rising spot gas prices.

At next-day markets, power at the New England Mass Hub and PJM West was exchanged $1 to $3 higher from Tuesday with deals done in the high $20s to low $30s at the former and the high $30s to low $40s at the latter.

Demand is set to rise in the Northeast with load in New England possibly reaching 15,350 MW on Wednesday and 15,700 MW on Thursday, while demand in New York should top out at 18,830 MW on Wednesday and 19,276 MW on Thursday.

Mirroring elevated load forecasts, day-ahead markets in the Northeast moved higher. Deals at the Mass hub added roughly $7 and averaged $35.07, while action in New York notched gains of $1 to $3 on the session and posted averages of $25.22 at New York Zone A, $29.13 at New York Zone G and $36.06 at New York Zone J.

Conversely, load outlooks in the mid-Atlantic diverged with the PJM Mid-Atlantic region called to see demand reach 32,086 MW on Wednesday and 35,326 MW on Thursday, while load in the PJM Western region may touch highs of 53,844 MW on Wednesday and 52,303 MW on Thursday.

Midwest markets firm with gas support

Power prices in the Midwest were firm Wednesday as higher spot gas prices offset subdued Thursday demand forecasts.

PJM AEP-Dayton saw the bulk of Wednesday's trading activity with power exchanged in the low $40s, adding roughly $3 from Tuesday.

Demand is set to fall by the latter part of the workweek with the PJM AEP region expected to see highs of 16,859 MW on Wednesday and 16,791 MW on Thursday, while the PJM ComEd region should see peaks of 12,983 MW on Wednesday and 11,773 MW on Thursday.

Most West dailies tick higher; COB trades flounder

Daily power trading activity in the West, excluding deals done at the California-Oregon Border hub, moved higher Wednesday reflecting strong Thursday demand forecasts and gains at major spot gas markets.

Hubs in the Southwest saw the biggest gains with on-peak trades up roughly $4 and ranging in the low to high $30s at Palo Verde and Mead. In California, South Path-15 heavy load deals added close to $2 and were pegged in the mid-$30s.

Markets in the Northwest were mixed with Mid-Columbia trades up around a dollar in the mid- to high $20s, while COB transactions eased and spanned the high $20s to low $30s.

The California ISO is projecting peaks of 30,247 MW on Wednesday and 31,370 MW on Thursday.

Texas DAMs mixed on slack demand, higher gas prices

Day-ahead markets in Texas moved in different directions Wednesday amid calls of slack Thursday demand and a rebound in spot gas prices.

Load in Texas is projected to hit highs of 55,625 MW on Wednesday and 53,645 MW on Thursday.

Pressured by slack demand, day-ahead deals at ERCOT Houston slipped roughly $5 to an average of $45.12, while trades at ERCOT South eased and averaged $36.23. Day-ahead transactions at ERCOT North and ERCOT West were about a dollar higher from Tuesday and averaged $26.32 and $28.55, respectively.

Market prices and included industry data are current as of the time of publication and are subject to change. For more detailed market data, including power, natural gas and coal index prices, as well as forwards and futures, visit our Commodities Pages