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Daily power markets mixed as fundamentals diverge

Q2: U.S. Solar and Wind Power by the Numbers

Essential Energy Insights - September 17, 2020

Essential Energy Insights September 2020

Rate case activity slips, COVID-19 proceedings remain at the forefront in August


Daily power markets mixed as fundamentals diverge

Support from higher spot natural gas prices countered deflated midweek load forecasts and pulled next-day power markets in different directions Tuesday, Nov. 28.

Following a session of gains the day prior, the front-month December natural gas futures contract extended higher Tuesday and rolled off the board at $3.074/MMBtu, up 14.6 cents. The new front-month January 2018 contract closed the session with an 11.1-cent increase at $3.128/MMBtu. In tandem with futures, most spot gas markets moved higher, which supported daily power prices.

In other supply, total U.S. nuclear plant availability rose early Nov. 28 to 92.76%, boosted by the return of two reactors.

Western power markets mixed despite fundamental backing

Outlooks for elevated Wednesday demand and support from firm spot gas prices could not keep some West markets from shedding value Tuesday.

In California, power packages at South Path-15 added about $7 on the session and ranged in the low to high $50s. In the Southwest, Palo Verde packages ranged in the low to mid-$20s, while Mead transactions were posted in the mid- to high $20s, off about $1 each. In the Northwest, moves were mixed but muted, with Mid-Columbia packages flat to Monday in the low to mid-$20s, while California-Oregon Border prices were down less than a dollar in the high $20s.

The California ISO is calling for demand to reach 29,132 MW on Tuesday and 29,576 MW on Wednesday.

Gas gains keep East values steady

Higher spot gas prices countered outlooks for slack midweek demand and helped keep next-day power markets in the East in shallow positive territory Tuesday.

PJM West saw the bulk of Tuesday's action, with next-day power exchanged in the high $20s, up less than a dollar from Monday.

On the other hand, day-ahead markets floundered. Deals at the New England Mass hub, New York Zone G and New York Zone J shed $2 to $4 on the session and averaged $29.57, $28.09 and $29.20, respectively, while trades at New York Zone A slipped by less than a dollar and averaged $24.50.

Grid operators are projecting slack demand for midweek. Load in New England may run up to 16,800 MW on Tuesday and 16,320 MW on Wednesday, while demand in New York should crest at 19,636 MW on Tuesday and 19,449 MW on Wednesday. Load in the PJM Mid-Atlantic region could top out at 34,068 MW on Tuesday and 33,380 MW on Wednesday, while demand in the PJM Western region may near highs of 51,287 MW on Tuesday and 50,840 MW on Wednesday.

Texas markets respond to slack demand forecasts with gains

Despite outlooks for subdued Wednesday demand, day-ahead markets in Texas moved higher Tuesday with values finding support in rising spot gas prices.

The Electric Reliability Council of Texas is calling for peaks of 40,204 MW on Tuesday and 39,239 MW on Wednesday.

However, day-ahead markets defied the load forecasts by posting gains of $2 to $7 on the session and averaging $25.00 at ERCOT Houston, $23.85 at ERCOT North, $26.07 at ERCOT South and $24.23 at ERCOT West.

Midwest markets supported by higher gas prices

Daily power markets in the Midwest spent a quiet Tuesday session pressured by mixed load forecasts but supported by higher spot gas prices.

The PJM AEP region could see demand hit 17,197 MW on Tuesday and 15,589 MW on Wednesday, while demand in the PJM ComEd region should note highs of 11,994 MW on Tuesday and 12,039 MW on Wednesday.

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.