WEST Surging demand due to the scorching heat throughout California, combined with limited hydro production in the Pacific Northwest, has jacked up prices during the nightly ramp this week. Temperatures are beginning to drop, so demand should normalize. Nonetheless, upside risks in the nightly ramp remain as thermal and nuclear facilities enter maintenance season, decreasing the amount of flexible supply available. In the term market, prices for the balance of this year remain elevated, but CY2021 and beyond continue to decline on falling NYMEX prices.
ERCOT After the first cold front of the year moved in last weekend, peak loads have decreased into the mid-to-upper 40,000-MW range for the week. With ample generation reserves available, RT prices have averaged only around $15/MWh across all zones. Forward prices have also retreated from last week after Vistra did not announce further coal retirements in ERCOT during its recent investor call. Consequently, July/August 2021 and 2022 summer on-peak prices sold off by approximately $5/MWh. In conjunction with falling NG prices, this drop has dragged the CY21 and CY22 7x24 strips down by $1-$1.50/MWh, whereas outer-year CY strips are down by only $0.25-$0.50/MWh.
EAST Day Ahead basis in New England picked up at the end of September because of a binding constraint on the West-East interface due to a planned outage of the Phase II interconnection, which transmits power imported from Hydro-Quebec. In Connecticut and Vermont, Day Ahead prices were below those of Mass Hub by as much as $17/MWh during a few on-peak hours, whereas the eastern zones were higher by as much as $13/MWh. In WCMA, Day Ahead prices were also below its neighbor Mass Hub, albeit only by as much as $1.50/MWh.