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AM Power Report: Dailies could be split between retreating load, rising gas

The price of next-day power could be aimed in diverging directions Thursday, Dec. 28, as expectations for generally weaker load at the close of the abbreviated workweek collide with ongoing gains in natural gas futures trading.

At last glance at 7 a.m. ET, the NYMEX February 2018 natural gas futures contract was at $2.825/MMBtu, up 9.3 cents overnight, padding the 7.8 cents added in the prior session.

On the demand side, most grid operators across the country see diminished load at the close of the truncated workweek, as business-related demand typically tapers off approaching the weekend break.

In the Northeast, demand in New England is expected to crest at 20,400 MW on Thursday and 19,540 MW on Friday, while load in New York is projected to reach highs at 23,256 MW on Thursday and 22,781 MW on Friday. Farther south, PJM Western region load is seen peaking at 65,817 MW on Thursday and 63,027 MW on Friday, while PJM Mid-Atlantic demand should near 44,485 MW on Thursday and 43,522 MW at the end of the business week.

In the Midwest, demand in the PJM AEP region is called to reach 21,550 MW on Thursday and 20,557 MW on Friday, while load in PJM ComEd is forecast to see highs at 14,794 MW on Thursday and 14,219 MW on Friday.

In the South, ERCOT demand could touch a high near 49,730 MW on Thursday and 47,880 MW at the close of the workweek.

In the West, California load is poised to top out at 29,249 MW on Thursday and 28,272 MW on Friday, which should provide additional pressure on power dailies in the region Thursday when the day's offering is typically revised to feature two-day partly weekend parcels for Friday-Saturday delivery.

At the term markets, increased fueling costs implied by gains at the natural gas futures arena encouraged the upside to prevail in price activity for January 2018 power Wednesday, except in the West.

In the East, January 2018 power surged by almost $21 to the low $100s in New England and rose by about $7 to the high $40s at PJM West. Further along the forward curve, February 2018 power was valued in the low $80s in New England and in the low $40s at PJM West.

In the Midwest, prompt-month power transactions ascended by roughly $5 at the PJM markets to the low $40s at the AD hub and the high $30s at the Northern Illinois hub, as similar deals climbed by more than $3 also to the high $30s at MISO Indiana. Looking ahead, power trades for February 2018 delivery were assessed in the low to high $30s overall.

In the South, gains of between 50 cents and 60 cents at the ERCOT markets took pricing for January 2018 power to the $20s. Regional price action for February 2018 power similarly ran through the $20s.

In the West, California saw front-month power values falter by between 40 cents and 50 cents against the broad uptrend to the high $30s at North Path-15 and the low $40s at South Path-15, as month-ahead power prices at Mid-Columbia and Palo Verde also defied the wider uptick with an almost $2 decline and a 60-cent slump, respectively, to the high $20s at both hubs. Further out, pricing for February 2018 power was pegged in the low to mid-$30s in California and in the low $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.