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US power markets mixed with varied load, sagging gas prices

Major next-day power markets in the U.S. moved in different directions Wednesday, May 31, amid outlooks for varied Thursday demand and a decrease in spot gas prices.

In natural gas futures trading, the front-month July contract remained tethered to the downside and closed the day at $3.071/MMBtu, down 7.4 cents. Likewise, spot gas markets leaned flat to predominantly lower and provided power values with no support.

Following the loss of Exelon Corp.'s Clinton Power Station in Illinois and two other curtailments, total U.S. nuclear plant availability slipped to 88.73% by early May 31.

West power dailies biased higher with demand

Elevated Thursday load forecasts provided a boost to western power markets Wednesday but with falling spot gas prices keeping gains in check.

In the Southwest, Palo Verde and Mead deals added around a dollar from Tuesday and exchanged power in the low $30s. In California, on-peak deals at South Path-15 were little changed from Tuesday and were heard in the high $20s to low $30s. Flat to lower moves were seen in the Northwest with Mid-Columbia rising by around $4 in the mid- to high teens while transactions at the California-Oregon Border hub were down by less than $1 in the low to mid-$20s.

The California ISO is expecting demand to run up to 29,025 MW on Wednesday and 29,712 MW on Thursday.

Midwest values firm despite slack fundamentals

Lower load forecasts and a fall in regional spot gas prices failed to subdue power prices in the Midwest on Wednesday. Noting most of the session's next-day action was MISO Indiana, where power changed hands in the low $20s up by roughly a dollar from Tuesday.

Load is projected to fall in the Midwest with demand in the PJM AEP region possibly peaking at 15,864 MW on Wednesday and 15,746 MW on Thursday, while load in the PJM ComEd region could near highs of 11,674 MW on Wednesday and 12,016 MW on Thursday.

East power markets led lower by gas

Next-day prices in the East continued to retreat Wednesday as a decline in regional spot gas prices countered forecasts for firm Thursday demand.

At the New England Mass hub, next-day deals were done in the low to mid-$20s, down around $2 from Tuesday, while PJM West trades shed less than $1 and remained in the high $20s.

Mixed to ultimately higher moves were noted across regional day-ahead markets as the Mass hub and New York Zone G were flat to Tuesday and averaged $22.85 and $25.82, respectively, while New York Zone A day-ahead transactions were up around $2 and averaged $26.77. Day-ahead deals at New York Zone J ran the other way and fell by more than $5 to an average of $28.83.

Slightly stronger demand may be in store for the Northeast. New England load may top out at 14,720 MW on Wednesday and 14,950 MW on Thursday while demand in New York should crest at 18,402 MW on Wednesday and 18,563 MW on Thursday.

Load in the mid-Atlantic may diverge by the latter part of the workweek. Load in the PJM Mid-Atlantic region may reach highs of 33,399 MW on Wednesday and 33,805 MW on Thursday, while load in the PJM Western region should near peaks of 50,961 MW on Wednesday and 50,135 MW on Thursday.

Fundamental support eludes Texas dailies at midweek

Sluggish Thursday load forecasts and sagging spot gas prices offered power markets in Texas with no support on Wednesday.

Demand in Texas may touch peaks of 56,208 MW on Wednesday and 52,369 MW on Thursday. Depressed by the load outlooks, next-day deals at ERCOT North slipped by almost $2 and spanned the high $20s.

Day-ahead markets diverged with ERCOT Houston up by about $1 to an average of $34.91 while ERCOT South deals were little changed from Tuesday and averaged $31.57. Deals at ERCOT North and ERCOT West shed $2 to $3 from Tuesday and averaged $25.74 and $27.02, respectively.

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, natural gas and coal index prices, as well as forwards and futures, visit our Commodities pages.