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AM Power Report: Dailies could retreat with demand

Next-day power values could dwindle Tuesday, Dec. 20, as market participants consider forecasts for generally diminished demand at midweek alongside the recent weakness at the natural gas futures arena.

Losing 2.3 cents in the prior session and more than 40 cents in the last seven sessions, January 2017 natural gas futures were unwinding again early Tuesday amid ongoing profit-taking. At last look, the contract was down another 4.5 cents to $3.347/MMBtu.

Amid the ongoing softness for futures, day-ahead natural gas markets could leak lower in most cases on Tuesday, absent any weather-side support in certain regions of the country such as the Northeast, where cold weather continues to prevail.

On the demand side, load outlooks for midweek are mostly pointed lower.

In the Northeast, demand in New England is expected to crest at 19,000 MW on Tuesday and 18,250 MW on Wednesday, while load in New York is projected to reach highs at 21,487 MW on Tuesday and 21,154 MW at midweek. Farther south, PJM Western region load is seen peaking at 62,934 MW on Tuesday and 58,441 MW on Wednesday, while PJM Mid-Atlantic demand should near 41,656 MW on Tuesday and 39,333 MW on Wednesday.

In the Midwest, demand in the PJM AEP region is called to reach 20,331 MW on Tuesday and 18,955 MW on Wednesday, while load in PJM ComEd is forecast to see highs at 15,167 MW on Tuesday and 13,784 MW at midweek.

In the South, ERCOT demand could touch a high near 54,095 MW on Tuesday and 47,376 MW on Wednesday. In the West, CAISO load is poised to top out at 30,750 MW on Tuesday and 30,000 MW on Wednesday.

Along the forward curve, price activity for January 2017 power was varied but predominantly weaker coming off the weekend, as ongoing losses at the natural gas futures complex kept fueling costs deflated.

In the East, front-month power deals were down more than $1 at an index close to $67 at NEPOOL-Mass but up by nearly 30 cents against the dominant downtrend at an average at roughly $47 at PJM West. Power transactions for delivery in February 2017 were spotted also in the high $60s in New England and in the high $40s at PJM West.

In the Midwest, power deals for January 2017 at the PJM markets were quoted near $40, about 20 cents softer on the day at the AD hub but up $2 against the wider decline at the Northern Illinois hub, while a similar offering at MISO Indiana shed almost $3 in transactions done at about $43. Power parcels for February 2017 across the three hubs were similarly marked in the high $30s to the low $40s

In the South, price action for month-ahead power at the ERCOT markets slumped by about 20 cents across the board to indexes on either side of $31, while regional pricing for February 2017 power likewise spanned the low $30s.

In the West, California saw power values for January 2017 unravel almost 50 cents to average near $39 at North Path-15 and close to $37 at South Path-15, as prompt-month prices advanced by roughly 10 cents against the broad retreat to an index at about $30 at Mid-Columbia but slid by around 40 cents to an index at $29 at Palo Verde. Along the forward curve, power pricing for February 2017 was pegged in the low to high $30s in California and also in the 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.