POWER MARKETS
WEST Last Sunday’s explosion on the Cimmaron portion of the El Paso Natural Gas Pipeline, which connects the Permian Basin to Southern California, has jeopardized the supply of natural gas on which SoCal Gas relies for daily balancing. Because, as of now, this pipeline will be out of commission indefinitely, SoCal Gas will have to count on its own stores for the balance of the summer. Fortunately, its inventories are at yearly highs. Forward markets for Bal-Year 2021 and Calendar Year 2022 spiked on Monday after the news but eased back down on Tuesday, erasing the initial price increase.
ERCOT Real-time prices have settled in the low $30s/MWh at all load zones this week. Evening showers and continuing negligibility in drought conditions across the state have dampened market volatility. Led by falling term natural gas prices, term prices have fallen by nearly $1.00/MWh this week. In addition, the ORDC adder is still minimal, and the tropics remain clear.
EAST Load has exceeded expectations in ISO-NE all week, driving up both Day Ahead and Real Time LMPs. The Day Ahead and Real Time averages there are $54/MWh and $55/MWh, respectively. Both Day Ahead and Real Time are also higher this week in NYISO because of load upside and exports to ISO-NE. In Hudson Valley, Day Ahead is averaging $44/MWh while Real Time is averaging $46/MWh. The story is similar in PJM, where load has been surprisingly large. However, the DART spread has been minimal this week in West Hub, where both Day Ahead and Real Time are around $40/MWh.