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US power dailies jumbled amid choppy load outlook

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Essential Energy Insights - September 17, 2020

Essential Energy Insights September 2020

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


US power dailies jumbled amid choppy load outlook

Next-day power prices across the U.S. were jumbled Tuesday,May 10, as dailies reflected forecasts calling for choppy midweek load and littlesupport from varied but slightly higher spot natural gas prices.

After tickinghigher in early trading, the front-month June natural gas futures contractclosed the day up 6.0 cents at $2.158/MMBtu. Likewise, spot natural gas marketsmoved mixed but ultimately higher.

In other supply, the exit of three reactors from plannedmaintenance work sent total U.S. nuclearplant availability higher early May 10 to 84.41%, up from 83.70% onMay 9 and also above the 84.15% level recorded on the same day a year ago.

East dailiesnotch losses; PJM West firm

Next-day power products in the eastern U.S., with the exceptionof trades done at PJM West, favored the downside Tuesday owing to conflicting cuesfrom varied load forecasts and a lack of support from sagging spot natural gas prices.

Next-day deals at NEPOOL-Mass, New York Zone A and NewYork Zone G were all done in the low $20s, each easing from prior-day indexes of$22.75, $24.00 and $23.75, respectively, while transactions at PJM West added littlemore than a dollar on the session in the high $20s.

Day-ahead markets in the Northeast generally followed theirnext-day counterparts and notched losses as well. DAM transactions at NEPOOL-Mass,New York Zone G and New York Zone J lost more than a dollar from Monday to postaverages of $21.03, $22.04 and $26.81, respectively, while DAM trades at New YorkZone A fell by more than $5 to average $15.27.

Spot gas values retreated and failed to support power dailies.Gas trades at TETCO-M3 slipped by more than 5 cents to an average below $1.50/MMBtu,while deals at Transco Zone 6 New York tumbled by more than 10 cents to averagebelow $1.65/MMBtu.

Midweek load outlooks in the Northeast and Mid-Atlanticare varied, with peak Wednesday demand in New England possibly hitting 14,250 MW,up 150 MW from Tuesday, while load in New York may see a high at 17,700 MW on Wednesday,down 300 MW from the day prior.

PJM Mid-Atlantic region forecasts a Wednesday high at 30,687MW, adding nearly 500 MW from Tuesday, while demand in the PJM Western region shouldtop out at 46,742 MW, shedding more than 200 MW from the previous day.

Midwestdailies steady with gas support

Power markets in the Midwest were firm Tuesday as an uptickin spot natural gas prices was able to offset pressure from softer Wednesday loadprojections. MISO Indiana saw most of the session's action, with power deals borderingthe low $30s, little changed from Monday's index of $30.25.

PJM regions in the Midwest expect declining midweek demand,with demand in the PJM AEP region potentially peaking at 14,939 MW on Wednesdaydown by around 300 MW from Tuesday, while load in the PJM ComEd region should crestat 11,306 MW on Wednesday, down by little more than 80 MW from the prior day.

Spot gas markets moved higher and provided dailies withsupport. Gas trades at Chicago Citygates and NNG Demarc added more than 5 centsfrom Monday to rise to averages around above $2.00/MMBtu and $1.95/MMBtu, respectively,

ERCOTdailies ease with sluggish demand

Price activity in Texas was oriented to the modest downsideTuesday, as forecasts calling for slack midweek load counterbalanced support fromflat to higher regional spot natural gas prices.

ERCOT projects peak demand to run up to 51,042 MW on Wednesday,losing around 1,900 MW from Tuesday. Depressed by load, next-day deals at ERCOTNorth leaned flat to lower and were done in the high $20s and low $30s.

Day-ahead markets were also biased lower. DAM trades atERCOT North and ERCOT South shed more than a dollar from Monday to post averagesof $27.63 and $27.96, respectively, while DAM transactions at ERCOT West slippedby less than a dollar on the session to average $27.53. Defying the wider declinewere DAM deals at ERCOT Houston, which saw little change from Monday to average$29.12.

Spot gas markets were flat to higher, with gas trades atthe Henry Hub up by more than 5 cents to an average above $2.00/MMBtu, while transactionsat El Paso Permian were flat to Monday and retained an average slightly below $1.90/MMBtu.

Most Westmarkets favor gains; Palo Verde and COB falter

Power packages on the western side of the country weremixed to higher Tuesday, as most markets latched on to forecasts anticipating strongerdemand and little support derived from flat to higher spot natural gas prices.

Gains of $2 to $3 enveloped deals in California, with tradesat North Path-15 done in the mid- to high $20s, while transactions at South Path-15were posted in the high $20s. Power packages in the Northwest leaned flat to higher,with Mid-Columbia adding around a dollar in the mid- to high teens while tradesat COB eased on the session in the low $20s. In the Southwest, power deals at PaloVerde lost around a dollar from Monday and were exchanged in the low $20s.

Spot gas markets posted varied but mostly higher moves,with gas trades at PG&E Citygates adding close to 5 cents on the session toaverage above $2.15/MMBtu, while transactions at Malin and SoCal Border were flatto Monday as both retained averages above $1.95/MMBtu.

The California ISO projects demand to surpass 30,400 MWon Wednesday, up by around 500 MW from Tuesday.

Market prices and included industry data are current asof the time of publication and are subject to change. For more detailed market data,including power,natural gas andcoal index prices, as well asforwards andfutures, visit our Commodities Pages.