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Highlights

SoCal city-gate spot gas dropped 30% year on year

Cal-ISO imports up 35% from April, 26% from 2019

BPA exported power climbed 134% month on month

Houston — Weaker gas prices and a jump in solar generation pulled down wholesale power prices across the West in May, while California relied on significantly more imported power due to lower hydro conditions across the state as summer heat began to hit the region.

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Imports became the top source of power supply in May at 26% of the total mix, a jump of nearly 5 percentage points, according to ISO data. Imports averaged 144,532 MWh/d, climbing 35% month on month and up 26% year on year.

Total ISO generation averaged 557,804 MWh/d, up nearly 11% month on month as the state began to lift stay-home restrictions and temperatures began to rise in early May.

Normally, hydro would provide the additional generation needed in spring as people crank up the AC in response to rising temperatures, which melt mountain snow to fill hydro reservoirs. However, Cal-ISO hydro generation slipped nearly 8 percentage points on the year to average 11.4% of the total stack in May, as output averaged 63,777 MWh/d, a loss of 40% year on year despite rising 35% month on month.

Natural gas-fired generation output averaged 107,108 MWh/d, a decrease of 14.5% month on month, but an increase of 27.4% year on year.

Solar generation output climbed 59% since April to average 103,520 MWh/d, which was also up 15% from a year ago.

Cal-ISO peakload averaged 28,304 MW in May, up nearly 13% month on month and up almost 7% year on year, according to ISO data. Los Angeles average May temperatures were 5 degrees above normal and reached as high as 95 degrees, according to the US National Weather Service. Sacramento hit a high of 104 degrees as average May temperatures were 4 degrees above normal.

NORTHWEST GENERATION

BPA peakload averaged 6,406 MW, down nearly 6% on the month. Portland's average May temperatures were 2 degrees above normal as highs reached 91 during the month.

BPA hydro remained the top fuel source at 84% of the mix in May, up nearly 18 percentage points month on month, but down almost 4 percentage points year on year, according to BPA data. Hydro output jumped 80.2% month on month to average 259,111 MWh/d. All other fuel sources fell month on month. The influx of hydro pushed thermal output down 80% month on month.

BPA exports spiked 134% from April to average 167,987 MWh/d in May, an increase of nearly 13% from a year ago.

SPOT PRICES

Mid-C on-peak day-ahead were the lowest prices in the region, averaging $11.58/MWh for the month, plunging nearly 37% month on month with the influx of hydro generation and a decrease of almost 23% from a year ago, according to Platts data.

NP15 posted the highest price average for May with on-peak day-ahead location marginal prices averaging $17.50/MWh, down $4.25, the smallest year-on-year movement, according to ISO data.

Helping pull down power prices, SoCal city-gate sank 27% year on year to average $2.039/MMBtu, but rose 17.3% month on month, the first monthly gains in 2020, according to S&P Global Platts data.

Palo Verde was the only pricing location to jump year on year as on-peak day-ahead averaged $14.78/MWh, up 15.3%. Phoenix temperatures reached as high as 112 degrees and average May temperatures were 4 degrees above normal. A year ago, western power prices sank on increased hydro and low gas prices, and Palo Verde prices fell to one of the lowest levels in Platts assessment history with the monthly average that was the lowest in Platts history.

FORWARD CURVE

Mid-C on-peak June rolled off the curve at $13.70/MWh, $9.70 lower than a year ago. The package averaged $14.79/MWh in its last month, a drop of 43% from where the 2019 package averaged a year ago, according to Platts data.

Prices of contracts further down the curve fell even deeper below 2019 package levels.

Mid-C on-peak July averaged $32.12/MWh, 48.3% lower than its 2019 counterpart, while on-peak August averaged $38.63/MWh, 48.7% lower.

Across the West, on-peak June packages averaged 30% lower than their 2019 counterparts, on-peak July averaged 44% lower and on-peak August 44.4% lower.