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AM Power Report: Dailies could retreat with load, gas in week's opener

Price action for power dailies could unwind in the week's opening session Monday, Jan. 30, as predominantly declining demand forecasts for Tuesday conspire with weakness at the natural gas futures arena.

Rolling into the front-month slot with the Jan. 27 expiration of the February contract, March natural gas futures were down in early trade Monday ahead of the opening bell. At last glance, the contract was down 5.6 cents to $3.302/MMBtu on profit-taking.

Day-ahead natural gas markets could shift lower in most cases Monday, following the lead of the new front-month futures contract.

On the demand side, most grid operators across the country see easing load as the new workweek unfolds.

In the Northeast, demand in New England is poised to defy the broad decline as it is forecast to peak at 17,600 MW on Monday and 17,780 MW on Tuesday, while load in New York is called to reach 21,492 MW at the start of the new business week and 21,197 MW on Tuesday. In the Mid-Atlantic, the PJM Interconnection operator sees demand in PJM Western region cresting at 60,045 MW on Monday and 56,823 MW on Tuesday, while load in PJM Mid-Atlantic is projected to hit highs at 40,348 MW on Monday and 39,474 MW on Tuesday.

In the Midwest, PJM AEP region load could reach highs at 18,881 MW on Monday and 18,011 MW on Tuesday, while PJM ComEd demand could top out at 13,555 MW at the return of the workweek and 13,132 MW on Tuesday.

In the South, load in ERCOT is forecast to see highs at 41,046 MW on Monday and 39,413 MW on Tuesday. In the West, CAISO demand should near 29,330 MW on Monday and 29,660 MW on Tuesday.

At the term markets, the price of power for February was predominantly weaker ahead of the weekend, even as February natural gas futures extended gains into contract expiration to ultimately keep fueling costs elevated.

In the East, trading activity for prompt-month power was off by over $1 at an index at near $59 at NEPOOL-Mass but was up by about 20 cents against the broad decline at an average near $40 at PJM West. Along the forward curve, power deals for March were assessed in the high $40s in New England and in the high $30s at PJM West.

In the Midwest, power values for February slumped by about 40 cents to an index at about $37 at PJM AD and fell by almost $2 to an average at roughly $35 at PJM Northern Illinois, as MISO Indiana front-month pricing deflated by over $1 to an index at close to $42. Power prices for March across the three hubs were similarly pegged in the mid-$30s to the low $40s.

In the South, losses of between $1 and $2 steered price action for February power to indexes near $31 at ERCOT Houston and on either side of $27 at the rest of the ERCOT markets. Meanwhile, regional pricing for March power likewise ran through the high $20s to the low $30s.

In the West, California saw front-month power trades crumble by over $2 to average at roughly $35 at North Path-15 and at almost $33 at South Path-15, as similar deals recoiled by about 80 cents to an index at close to $30 at Mid-Columbia and faltered by more than $1 to an index atop $26 at Palo Verde. Transactions for March power were carried out in the high $20s 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.