Houston — Midcontinent Independent System Operator day-ahead on-peak locational marginal prices were up this April, from the pandemic lockdown-induced weak prices of April 2020, and summer forwards also strengthened over the period on natural gas forwards and a warmer-than-normal weather forecast.
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Day-ahead on-peak LMPs this April ranged from high $20s/MWh to low $30s/MWh across five geographically dispersed hubs, up from a range from about $16/MWh to less than $22/MWh in April 2020, according to the S&P Global Platts price database. This March, most day-ahead on-peak LMPs ranged from mid-$20s/MWh to about $30/MWh.
The year-on-year power price increases reflected significant spot gas price increases – about 52.5% -- at the Chicago city-gates, which averaged $2.541/MMBtu this April, and at Henry Hub, which averaged $2.573/MMBtu this April. The Chicago city-gates price was $2.471/MMBtu this March, and Henry Hub's price was $2.565/MMBtu.
At an average daily peakload of 71.6 GW this April, MISO's power demand was down 3.4% from this March but up 7.7% from April 2020's 66.5 GW, according to MISO data.
But the weather was not the determining factor in these demand changes. Population-weighted average heating-degree days were down by almost 33% on the month and about 19.5% on the year, according to CustomWeather data. The population-weighted average low temperature this April was 41.4 degrees Fahrenheit, up from this March's 34 F and April 2020's 38 F.
Forwards were also higher on the month and year due to stronger gas prices and warmer-than-normal weather forecasts.
For example, Indiana Hub June on-peak power averaged about $32.35/MWh this April, up from about $31.10/MWh this March and up from the $25.05/MWh that June 2020 on-peak power averaged in April 2020.
Louisiana Hub June on-peak power averaged about $28.25/MWh this April, up from about $27/MWh this March and up from the $25.10/MWh that June 2020 on-peak power averaged in April 2020.
These power forwards reflected similar strength in natural gas forwards. Chicago city-gates June gas averaged $2.623/MMBtu this April, up from $2.541/MMBtu this March and $1.739/MMBtu for June 2020 gas in April 2020.
Henry Hub June gas averaged $2.753/MMBtu this April, up from $2.715/MMBtu this March and $1.88/MMBtu for June 2020 gas in April 2020.
The National Weather Service's forecast for June, July and August indicated strong chances – 40% to 60% -- of above-normal temperatures throughout MISO's sprawling footprint, which stretches from the Great Lakes and Canada to the Gulf of Mexico.
Accordingly, July and August forwards showed strength similar to June forwards.
For example, Indiana Hub July on-peak forwards averaged about $37.90/MWh this April, up from about $37.50/MWh this March and up from the $29.85/MWh that July 2020 power averaged in April 2020.
Chicago city-gates July gas averaged $2.698/MMBtu this April, up from $2.594/MMBtu this March and up from the $1.90/MMBtu that July 2020 gas averaged in April 2020.
Louisiana Hub August on-peak forwards averaged about $34.25/MWh this April, up from about $33.25/MWh this March and about $29/MWh for August 2020 power in April 2020.
Henry Hub August gas averaged $2.848/MMBtu this April, up from $2.791/MMBtu this March and $2.153/MMBtu for August 2020 gas in April 2020.
In terms of fundamentals affecting spot power prices, the generation mix's supply of the much diminished power demand, in comparison with this March, retained its relative rankings, with coal-fired power on top, followed by natural gas, wind, nuclear and hydro.
MISO's fleet delivered an average of 475.7 GWh/day this April, down from March's 542.8 GWh but up from April 2020's 309.8 GWh.
The share for the various types of generation:
- Coal: 37.9% this April, up from this March's 36.1% and April 2020's 24.1%
- Gas: 26.7% this April, up from this March's 25.5% but down from April 2020's 37.6%
- Wind: 19% this April, up from this March's 18.1% and April 2020's 15.9%
- Nuclear: 17.6% this April, up from this March's 16.7% but down from April 2020's 18%
- Hydro: 2% this April, up from this March's 1.9% but down from April 2020's 2.8%