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AM Power Report: Dailies could sag with load, gas

Day-ahead power values could slump Tuesday, Jan. 31, as the anticipation of reduced demand in much of the country at midweek conspires with ongoing losses at the natural gas futures complex.

Losing 12.6 cents in the week's opening session, March natural gas futures were extending lower ahead of the opening bell early Tuesday. At last look, the contract was down another 5.8 cents to trade near $3.174/MMBtu amid profit-taking and fresh selling.

In tandem with the continued losses in futures, next-day natural gas prices at most major consuming hubs are likely to tip lower Tuesday, absent any regional weather-side support.

In terms of demand, load outlooks for midweek are varied but predominantly aimed lower.

In the Northeast, demand in New England is expected to see highs at 18,050 MW on Tuesday and 17,350 MW on Wednesday, while load in New York is forecast to hit highs at 21,192 MW on Tuesday and 20,542 MW at midweek. To the south, PJM Western region load is projected to top out at 57,737 MW on Tuesday and 56,855 MW on Wednesday, while PJM Mid-Atlantic demand is called to reach 39,375 MW on Tuesday and 37,107 MW on Wednesday.

In the Midwest, load in PJM AEP region is seen peaking at 18,831 MW on Tuesday and 17,459 MW on Wednesday, while load in PJM ComEd is poised to hold firm against the broad decline as it is expected to crest at 13,302 MW on Tuesday and 13,355 MW at midweek.

In the South, ERCOT demand is projected to touch a high near 38,869 MW on Tuesday and 39,232 MW in the middle of the workweek, also defying the wider downtrend. In the West, load in CAISO should near 29,660 MW on Tuesday and 29,750 MW on Wednesday.

In forward activity, power transactions for February and March were mixed but mostly lower coming off the weekend Jan. 30, as weakness at the natural gas futures arena implied cheaper fueling costs. February power was in its penultimate session as the front-month offering.

In the East, pricing for February power shed almost $4 to average atop $55 at NEPOOL-Mass and deflated by over $1 to an index at above $38 at PJM West. Along the forward curve, power values for March were off a little more than $2 at indexes at over $47 in New England and at near $37 at PJM West.

In the Midwest, power deals for February fell by roughly $2 to an index at above $35 at PJM AD and slumped by about 60 cents to an average near $34 at PJM Northern Illinois, as similar transactions at MISO Indiana crumbled by almost $3 to average close to $39. Trading action for March power was down by over $2 at an index at near $35 at PJM AD, off more than $1 at an average at approximately $34 at PJM Northern Illinois and almost $3 weaker at an index atop $38 at MISO Indiana.

In the South, price action for February power at the ERCOT markets added more or less $1 against the dominant decline to average at about $27 to as much as $32, while regional pricing for March power delivery faltered by roughly 50 cents to as much as 65 cents to indexes spread between $26 and $32.

In the West, February power in California was up by about 80 cents in transactions done at roughly $36 at North Path-15 but down by $1 in deals carried out near $31 at South Path-15, while similar packages were weaker by more than $3 at an index atop $26 at Mid-Columbia and off by almost $1 at an average near $25 at Palo Verde. Power for March gained about 40 cents in deals averaging at close to $30 at NP-15 but fell by near $1 to an index atop $25 at SP-15, as similar parcels gave back more than $2 at Mid-Columbia and shed near $1 at Palo Verde in trades assessed at close to $21 and roughly $23, respectively.

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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.