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Daily power prices close workweek biased lower on weak fundamentals

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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 close workweek biased lower on weak fundamentals

A lack of support from lower load forecasts and retreating spot natural gas prices left daily power markets mixed to predominantly lower Friday, Dec. 15.

At the natural gas futures arena, the front-month January 2018 contract reversed early gains and closed the session down 7.2 cents at $2.612/MMBtu. Owing to slack weekend demand, spot gas markets floundered and provided dailies with little support.

According to the National Weather Service, "a cold front will bring rain and high elevation snowfall to the northern Rockies and Pacific Northwest," possibly giving a boost to heating demand in those regions.

Following the return of Tennessee Valley Authority's Watts Bar 2 in Tennessee, total U.S. nuclear plant availability rose early Dec. 15 to 95.15%.

Mass hub values firm; PJM West dailies tumble

Power prices in the East leaned flat to lower Friday owing to a decline in regional spot gas prices and expectations of deflated Dec. 18 demand.

At next-day markets, power deals at the New England Mass hub were flat to Thursday and ranged in the low to mid-$60s, while PJM West packages fell roughly $9 and spanned the high $20s to low $30s.

Trading for the lower-load Saturday, day-ahead markets took a few steps back. Deals at the Mass hub sank more than $15 and averaged $63.95, while New York Zone A, Zone G and Zone J trades shed $1 to $6 on the session and averaged $26.86, $44.53 and $45.65, respectively.

Contributing to the fall in daily power prices were lower spot gas prices. Gas deals at Transco Zone 6 New York fell more than $2.50 and averaged below $3.25/MMBtu, while trades at Tetco-M3 shed roughly 20 cents and averaged below $2.65/MMBtu.

Demand in the East may be off to a slow start next week with New England load poised to hit highs of 18,600 MW on Friday and 17,950 MW on Dec. 18, while demand in New York may peak at 21,900 MW on Friday and 21,100 MW on Dec. 18. The PJM Mid-Atlantic region is calling for highs of 42,695 MW on Friday and 36,623 MW on Dec. 18, while load in the PJM Western region should see peaks of 59,586 MW on Friday and 54,454 MW on Dec. 18.

Western power markets close workweek mixed

Power markets in the western U.S. saw varied moves Friday amid elevated Dec. 18 demand forecasts associated with next-day schedule revisions but with a lack of support from soft spot gas prices.

In California, North Path-15 deals shed about $8 and spanned the high $30s, while South Path-15 packages were down roughly $2 and were quoted in the low $40s. Power prices in the Northwest were mixed, with Mid-Columbia transactions down about a dollar in the low to mid-$20s, while power at the California-Oregon Border hub was priced in the high $20s, up about a dollar on the session. In the Southwest, on-peak deals at Palo Verde increased about a dollar and spanned the mid- to high $20s.

Demand in California may run up to 29,767 MW on Friday and 27,565 MW on Saturday but with load possibly rebounding at the start of the workweek Dec. 18.

Texas day-ahead deals shift lower on weekend demand, sagging gas prices

Day-ahead markets in Texas turned lower Friday owing to a combination of falling Saturday demand and tumbling spot gas prices.

At the day-ahead markets, ERCOT Houston, ERCOT North, ERCOT South and ERCOT West values fell by $2 to $8 from Thursday and averaged $21.12, $18.12, $20.72 and $15.54, respectively.

Demand in Texas is projected to peak at 44,267 MW on Friday and 41,233 MW on Dec. 18.

Midwest markets exit workweek without fundamental support

Daily power markets in the Midwest spent a quiet Friday session pressured by sluggish Dec. 18 demand forecasts and a downtick in regional spot gas prices.

Grid operators in the region expect subdued demand to start the workweek. The PJM AEP region should see load crest at 19,268 MW on Friday and 17,093 MW on Dec. 18, while demand in the PJM ComEd region could crest at 13,616 MW on Friday and 12,894 MW on Dec. 18.

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.