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US daily power prices biased higher with midweek demand forecasts

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US daily power prices biased higher with midweek demand forecasts

Expectations of elevated Wednesday demand supported most next-day power markets across the U.S. on Tuesday, Dec. 12, but with mixed spot natural gas prices working to limit gains.

In front-month gas futures, the January 2018 contract turned lower Tuesday and closed the session down 15.0 cents to a near 10-month low of $2.678/MMBtu. Spot natural gas markets were mixed with hubs in the East seeing sizeable gains driven by cold weather.

According to the National Weather Service, "Heavy snow, bitterly cold temperatures, and treacherous travel will be likely from the Great Lakes to the Northeast, and into New England over the next couple of days."

Following the loss of Tennessee Valley Authority's Watts Bar 2 in Tennessee, total U.S. nuclear plant availability slipped to 93.33% early Dec. 12.

East values climb with higher gas prices, cold weather

With cold weather gripping the region, power values in the East rose Tuesday, boosted by increased heating demand and a rise in regional spot gas prices.

Next-day deals at the New England Mass hub soared more than $15 and changed hands in the low to high $70s while New York Zone G trades were pegged in the low to mid-$60s, up from a Monday index of $46.50. PJM West transactions added around $9 and were done in the mid- to high $40s.

Day-ahead markets also advanced with prices at the Mass hub up roughly $19 to an average of $72.50, while gains of $1 to $6 were noted in New York with New York Zone A, Zone G and Zone J averaging $36.79, $47.98 and $53.30, respectively.

Sizeable gains in spot gas prices boosted power dailies. Deals at Algonquin Citygates were up more than $3 to an average around $10/MMBtu, while Tetco M3 and Transco Zone 6 New York saw trades rise more than $1.50 to averages above $4.50/MMBtu and $5.50/MMBtu, respectively.

Grid operators in the East are expecting elevated midweek demand. New England load may crest at 17,850 MW on Tuesday and 18,900 MW on Wednesday, while New York demand should top out at 21,141 MW on Tuesday and 22,414 MW on Wednesday. The PJM Mid-Atlantic region could note peaks of 38,488 MW on Tuesday and 40,682 MW on Wednesday, while load in the PJM Western region might touch highs of 61,299 MW on Tuesday and 61,804 MW on Wednesday.

Northwest, Southwest values favor gains; Calif. dailies retreat

Excluding deals done in California, power markets in the West mostly favored gains Tuesday following elevated demand forecasts but kept in check by varied spot gas prices.

In the Southwest, Palo Verde and Mead packages added $2 to $4 from Monday and were exchanged in the low to high $20s at the former and the high $30s at the latter. Gains of $1 to $2 were noted in the Northwest with Mid-Columbia deals seen in the low to mid-$30s while the California-Oregon Border hub saw power trade in the mid-$30s.

On the other hand, California dailies shed $2 to $6 on the session and were quoted in the high $30s to low $40s at North Path-15 and the high $40s to low $50s at South Path-15.

The California ISO is projecting peaks of 30,505 MW on Tuesday and 31,017 MW on Wednesday.

Midwest markets firm amid mixed fundamentals

A clash between strong load forecasts and easing spot gas prices kept power prices in the Midwest firm Tuesday. MISO Indiana saw the bulk of Tuesday's activity with values pegged in the mid-$30s, up less than a dollar from Monday.

Demand is projected to rise by midweek with the PJM AEP region called to see peaks of 19,436 MW on Tuesday and 20,295 MW on Wednesday, while the PJM ComEd region should see demand reach highs of 13,715 MW on Tuesday and 13,932 MW on Wednesday.

Texas values ease despite demand support

Robust midweek demand forecasts failed to prop up next-day values in Texas on Tuesday with mixed spot gas prices also giving little support.

Next-day deals at ERCOT North were done in the low $20s, down roughly a dollar from Monday.

Mixed but mostly muted moves were seen at day-ahead markets with ERCOT Houston, ERCOT North, ERCOT South and ERCOT West averaging $22.80, $21.23, $23.32 and $20.61, respectively.

Load in the Electric Reliability Council of Texas may hit highs of 42,744 MW on Tuesday and 46,682 MW on Wednesday.

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 and natural gas index prices, as well as forwards and futures, visit our Commodities Pages.