U.S. West power and natgas prices soar on freezing weather

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U.S. West Coast power and natural gas prices have more than doubled over the past couple of weeks – with gas hitting multi-year highs – as freezing weather and snow blankets parts of California and gas pipeline outages and constraints limit flows of the fuel from Texas.

In Northern California, next-day gas for Friday at the PG&E Citygate jumped to around $32 per million British thermal units (mmBtu), its highest since hitting $44 in December 2000.

That compares with a PG&E daily record of $53, which was also in December 2000.

Gas at the Southern California (SoCal) Border rose to $31 per mmBtu, its highest since hitting $103 in February 2021 when Winter Storm Uri cut gas supplies from Texas and forced the Texas electric grid operator to impose rolling power outages.

That compares with a SoCal Border record of over $136, which was also during the 2021 February Freeze.

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Next-day power at the Mid Columbia (Mid C) Hub in Washington State, Palo Verde in Arizona and SP-15 in Southern California all jumped to over $260 per megawatt hour (MWh), their highest since September.

In September, daily prices at the Mid C hit a record of $1,040 per MWh, while Palo Verde and SP-15 hit their second highest ever at $1,000 and $550, respectively.

Palo Verde and SP-15 hit records of $1,311 per MWh and $698, respectively, in August 2020 when an extreme heat wave forced California’s power grid operator to impose rolling outages.

The combination of mild weather in Texas and pipeline constraints and maintenance outages limiting gas flows to California helped cut spot prices at the Waha hub in the Permian basin in West Texas by around 80% over the past week to around $1 per mmBtu.