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AM Power Report: Dailies could be split between demand weakness, rising gas

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AM Power Report: Dailies could be split between demand weakness, rising gas

Price activity for power dailies could be choppy in the week's closing session Friday, Dec. 9, as expectations for mixed but predominantly softer demand coming off the weekend combine with ongoing gains at the natural gas futures arena.

Rising more than 9 cents on Dec. 8, January natural gas futures were extending higher early Friday ahead of the opening bell on pre-weekend short covering. At last look, the contract was up another 3.6 cents to $3.731/MMBtu, with colder weather forecasts and increased demand expectations stoking the ongoing gains.

In terms of demand, load projections for the start of the next workweek on Dec. 12 are aimed higher for the Northeast but pointed lower elsewhere in the country, even as business-related demand typically rebounds coming off the weekend break.

In the Northeast, demand in New England should near 17,780 MW on Friday and 18,020 MW on Dec. 12, while load in New York could peak at 20,673 MW on Friday and 20,886 MW on Dec. 12. Farther south, PJM Western region demand is seen touching a high near 58,997 MW on Friday and 56,182 MW at the return of the workweek, while PJM Mid-Atlantic load is expected to crest at 38,105 MW on Friday and 36,703 MW on Dec. 12.

In the Midwest, load in PJM AEP region is forecast to hit highs at 19,455 MW on Friday and 17,373 MW at the start of the next business week, while demand in PJM ComEd is called to reach 13,777 MW on Friday and 13,269 MW on Dec. 12.

In the South, load in ERCOT is projected to see highs at 52,504 MW on Friday and 40,030 MW on Dec. 12. In the West, demand in CAISO is poised to top out at 29,450 MW on Friday and 27,250 MW on Saturday, but should find some upside support on Dec. 12 as full industrial and commercial load recovers at the start of the new workweek.

Along the forward curve, power values for January 2017 predominantly advanced Dec. 8, in line with front-month natural gas futures that notched gains on the session to ultimately drive fueling costs higher.

In the East, transactions for month-ahead power added about 20 cents to average at near $87 at NEPOOL-Mass but deflated by more than $2 against the dominant uptrend to an index atop $56 at PJM West. Power deals for February 2017 were assessed in the high $80s in New England and in the mid-$50s at PJM West.

In the Midwest, an uptick of almost 30 cents took PJM AD January 2017 to an average above $50, as gains of over $4 steered trading activity for prompt-month power at both PJM Northern Illinois and MISO Indiana to indexes atop $51. Power for February 2017 across the three hubs was transacted in the high $40s to the low $50s.

In the South, front-month power prices at the ERCOT markets rose by over $1 across the board to indexes ranging roughly from $34 to above $35, while regional pricing for February 2017 power was spotted in the low $30s.

In the West, California saw trades for January 2017 power tack on more than $1 to average atop $41 at North Path-15 and at $39 at South Path-15, as prompt-month power deals climbed by around 90 cents to indexes above $29 at Mid-Columbia and at roughly $32 at Palo Verde. Power transactions for February 2017 were carried out in the high $30s in California and also in the high $20s to the low $30s elsewhere in the region.

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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.