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Most US power dailies exit workweek with gains; ERCOT flounders

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Essential Energy Insights - September 17, 2020

Essential Energy Insights September 2020

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Most US power dailies exit workweek with gains; ERCOT flounders

Next-day power values at most major U.S. markets, withthe exception of deals done in Texas, stayed on the positive side of the ledgerFriday, April 29, as some hubs ignored forecasts calling for subdued May 2demand and little support from mixed but mostly muted spot natural gas prices.

Posting a scantloss prior to the April 29 open, the front-month June natural gasfutures contract reversed the downtick and closed the day up by 10 cents tosettle at $2.178/MMBtu.

In addition, spot natural gas markets were mixed butposted mostly muted moves, with only deals in East noting a sizeable rebound. Spotgas trades done Friday were for the combined delivery days of May 1-2.

In other supply, total U.S.nuclear plant availabilitystumbled to 83.94% early April 29, down from 84.17% on April 28 but still muchhigher than the 82.48% recorded on the same day in 2015.

Eastdailies boosted by gas gains

Next-day power prices in the eastern U.S. moved higherFriday, as rebound in spot natural gas markets helped mitigate pressures frommostly softer May 2 load forecasts.

At NEPOOL-Mass, power deals ranged in the low $30s,adding in about $4 from Thursday, while trades at PJM West spanned the high$20s and low $30s and saw a modest increase of roughly $2.

Day-ahead markets traded products for Saturday, April30, delivery, with DAM deals at NEPOOL-Mass, New York Zone G and New York ZoneJ posting losses of $4 to $6 to drop to averages of $21.63, $22.14 and $22.75,respectively, while DAM transactions at New York Zone A fell by more than $10and averaged $16.71.

Supporting power dailies was a recovery in regionalspot gas markets. Gains of more than 10 cents were seen at TETCO-M3 and TranscoZone 6 New York which rose to averages around $1.40/MMBtu and close to$1.45/MMBtu, respectively.

Demand outlooks in the Northeast are varied, with loadin New England potentially touching 14,320 MW on May 2, climbing by 720 MW fromFriday, while demand in New York may crest at 17,642 MW on May 2, down morethan 100 MW from Friday.

On the other hand, PJM regions in the Mid-Atlanticproject softer load, as peak demand in the PJM Mid-Atlantic region is called toreach 30,157 MW on May 2, slipping by more than 100 MW from Friday, while loadin the PJM Western region could top out at 46,018 MW on May 2, also sheddingmore than 100 MW from Friday.

ERCOTdailies sag with sluggish demand

Next-day power products in Texas extended prior daylosses Friday, as forecasts calling for slack May 2 demand offset support fromflat to higher spot natural gas prices.

Load in Texas is set to fall at the start of the newworkweek; with the ERCOT grid operator anticipating demand to run up to 42,259MW on May 2, falling by more than 6,300 MW from Friday. Depressed by load,next-day power at ERCOT North was traded in the high teens for a daily loss ofmore $2.

Despite typically softer weekend load, most day-aheadmarkets favored the upside. DAM deals at ERCOT Houston, ERCOT North, ERCOTSouth and ERCOT West gained $2 to $5 from Thursday to rise to averages of$24.24, $23.53, $24.04 and $23.35, respectively.

Spot gas markets leaned flat to higher and gavedailies some support. Gas trades at the Henry Hub added more than a cent toaverage around $1.90/MMBtu, while transactions at El Paso Permian were littlechanged from Thursday and maintained an average above $1.70/MMBtu.

Westdailies tick higher in revised trade

Trading activity in the West was biased higher Friday,as traders latched on to projections of potentially stronger demand due tonext-day schedule revisions despite a lack of support from mostly muted spotnatural gas markets.

Next-day deals in the West were done for the combined deliverydays of May 1-2, with the inclusion of the usually higher load weekdaysupporting values. Encouraged by potentially stronger load,next-day trades in California rebounded, with South Path-15 climbing about $9from Thursday in the low $20s.

Power markets in the Southwest followed suit, withPalo Verde deals adding more than $3 in the high teens and low $20s, whiletransactions at Mead noted a premium of more than $5 with power exchanged inthe low $20s.

Hubs in the Northwest continued the trend, with powerat Mid-Columbia and COB adding $1 to $3 on the day. Deals at Mid-C were peggedin the low to mid-teens, while trades at COB were seen in the high teens.

Spot gas markets were mixed but saw little changeoverall, with gas deals at Malin and SoCal Border easing from Thursday toaverages around $1.75/MMBtu and roughly $1.80/MMBtu, respectively, while tradesat PG&E Citygates were steady to the day prior and maintained an averagebelow $2.00/MMBtu.

The California ISO forecasts Saturday load to hit 26,590MW, dropping more than 700 MW from Friday. However, demand should rebound atthe start of the new week on May 2, as business-related load typically recoversafter the weekend.

Midwestmarkets enter weekend unsupported

Power dailies in the central U.S. saw a dearth offundamental support Friday owing to forecasts suggesting slack May 2 demand andlittle support from easing spot natural gas prices.

PJM regions in the Midwest anticipate weaker demand tostart off the new workweek, with the PJM AEP region projecting a May 2 high at14,621 MW, down by more than 100 MW from Friday, while the PJM ComEd regionexpects load to peak at 10,971 MW on May 2, also stumbling by more than 100 MWfrom Friday.

Spot gas markets in the region posted lower but mostlymuted moves. Gas deals at Chicago Citygates and NNG Demarc eased on the sessionto averages below $1.95/MMBtu and $1.90/MMBtu, respectively.

Market prices and included industry data are currentas of the time of publication and are subject to change. For more detailedmarket data, including power, naturalgas and coal indexprices, as well as forwards and futures,visit our Commodities Pages.