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AM Power Report: Dailies could slip with load, gas to end week

Day-ahead power prices could retreat in the week's closing session Friday, Aug. 4, as the anticipation of generally weaker demand coming off the weekend conspires with ongoing losses in natural gas futures trading.

Dropping 1.1 cents in the prior day, NYMEX September natural gas futures were extending lower early Friday. At last look at 7:15 a.m. ET, the contract was down 3.9 cents to $2.761/MMBtu on pre-weekend profit taking.

In step with the continues weakness in futures, day-ahead natural gas prices are likely to lean lower Friday, with the inclusion of the lower-load weekend days in the trading package offering their typical pressure on values.

In terms of demand, grid operators across the country see varied but predominantly softer load at the start of the next workweek on Aug. 7, even as business-related demand typically rebounds coming off the weekend.

In the Northeast, load in New England is seen hitting highs at 19,450 MW on Friday and 16,800 MW on Aug. 7, while load in New York is forecast to peak at 25,867 MW on Friday and 21,408 MW on Aug. 7. To the south, PJM Western region demand is expected to top out at 57,797 MW on Friday and 55,342 MW on Aug. 7, while PJM Mid-Atlantic load is projected to see highs at 47,374 MW on Friday and 40,525 MW on Aug. 7.

In the Midwest, load in PJM AEP region is expected to crest at 17,619 MW on Friday and 16,963 MW at the start of the next workweek, while load in PJM ComEd is poised to defy the wider decline as it is called to reach 12,833 MW on Friday and 13,376 MW on Aug. 7.

In the South, demand in Texas is expected to touch a high near 62,698 MW on Friday and 63,409 MW on Aug. 7, also running against the broad downtrend.

In the West, load in California should near 42,521 MW on Friday and 37,950 MW on Aug. 5, but could find some upside momentum on Aug. 7 as full industrial and commercial demand returns at the start of the new workweek.

Along the forward curve, power for September delivery predominantly shed value Aug. 3, as a downdraft at the natural gas futures complex implied cheaper fueling costs.

In the East, price action for front-month power unraveled roughly 10 cents to average near $30 in New England and deflated by about 20 cents to an index at around $32 at PJM West. Power prices for October were pegged in the high $20s in New England and in the low $30s at PJM West.

In the Midwest, prompt-month power was quoted at around $32 at the PJM Interconnection markets in deals off almost 60 cents day on day at the AD hub but flat at the Northern Illinois hub, while a similar offering at MISO Indiana was marked at close to $34 in trades about 30 cents weaker on the day. Along the forward curve, power for October across the three hubs was transacted in the low to mid-$30s.

In the South, ERCOT North September climbed by roughly 40 cents against the wider decline to an average atop $28, while month-ahead power parcels at the rest of the ERCOT markets deflated by 30 cents to as much as 45 cents to indexes spread between $28 and $33. Regional trading activity for October power delivery spanned the low $20s to the low $30s.

In the West, California saw power values for September about 10 cents higher at North Path-15 but roughly 20 cents lower at South Path-15 at indexes on either side of $39, while front-month power prices were about 20 cents softer at Mid-Columbia and 40 cents weaker at Palo Verde at indexes around $28. Pricing for October power was similarly spotted in the high $30s in California and in the low to high $20s elsewhere in the region.

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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.