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United States Natural Gas Message Board

  • barc37000 barc37000 Jun 28, 2013 1:40 PM Flag

    heat wave impacting millions

    shorts are screwed next week

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    • Good Lord. It is almost July. It is supposed to be hot. NG is cheap and getting cheaper.

    • horrible here in california, land of liberal #$%$. steering wheel of cars are melting.

    • Unfortunately the weather map shows all states East of Oklahoma are in the grips of a descending jet stream with temps a bit below normal.

      Sentiment: Buy

    • Did you take into affect the industrial market is closed for holidays starting Friday - Today for a week outage! Would this have a affect, lol... Second the demographic area uses what for power, hover dam hydro... People stop the bs posting.

      • 1 Reply to airheadmw
      • California may face the biggest regional power shortages in more than a decade this summer, sending wholesale prices higher, as idled nuclear reactors and low hydroelectric output cut generating capacity.

        The California Independent System Operator Corp. said last month that managing the state grid, especially in parts of Southern California, will prove “difficult” because the system will be operating without Edison International (EIX)’s San Onofre nuclear power plant and two natural gas-fired units, while hydroelectric output will be at a three-year low. The nuclear plant, California’s single largest source of baseload power, accounts for 3.7 percent of the state’s capacity.

        Southern California wholesale electricity for July through September already is at the highest level for this season since 2008 on the outlook for a shift to costlier, more volatile fossil fuels. A strain on the grid could lead to power failures reminiscent of the state’s worst energy crisis in 2000 and 2001, when generation shortfalls and market manipulation by traders at companies including Enron Corp. sent prices to record highs and triggered blackouts that affected millions of customers in the most populous U.S. state.

        “California may see the biggest test since Enron manipulated the market,” Stephen Schork, president of Schork Group Inc., an energy consulting group in Villanova, Pennsylvania, said in an April 15 interview. “If you have a reactor down and you don’t have as much hydro, your fuel for air conditioning is going to have to come from gas.”
        Electricity at Southern California’s SP15 hub for July through September rose $1.55, or 2.6 percent, to $61.40 a megawatt-hour yesterday, a five-year seasonal high. Prices today fell 5 cents, or 0.1 percent, to $61.35.
        Rising Prices
        Electricity at the SP15 hub for next-day delivery has averaged $49.70 a megawatt-hour this year through April 18 on the Intercontinental Exchange, the most for the period in five years. Northern California’s NP15 hub has averaged $41.99 this year, the most since 2010. The shutdown of the San Onofre reactors boosted prices at the southern hub to an average premium of $7.81 a megawatt-hour against the northern hub, the most in 12 years. The five-year average is 95.65 cents.

        Abundant hydroelectric generation made up for the lost nuclear output in the Los Angeles basin last year, Michael Blaha, the principal analyst of North American power at Wood Mackenzie Ltd. in Houston, said in an interview. “There is always a threat of brownouts and blackouts and I think it’s higher this summer because of San Onofre being out and you’re not putting hydro into the basin,” he said.

        Weaker Hydro
        Final snowpack measurements, which are used to predict the output at hydropower dams, will be 45 percent to 50 percent of normal, according to Maurice Roos, chief hydrologist with the state’s Department of Water Resources in Sacramento. Only six years in the past 60 have been that low, he said.
        Low water levels in the U.S. Northwest may also cut electricity exports to California this summer, according to the Bonneville Power Administration, a federal agency that manages Columbia River basin power supplies. Transmission lines across the Oregon-California border have a combined capacity of 7,500 megawatts.

        Northwest Water
        Unless there is a surge in precipitation in April through June, the amount of water available for hydro in the Northwest will be lower than it has been in the past two years, Doug Johnson, a spokesman for the BPA in Portland, Oregon, said in an April 18 e-mail. Water levels exceeded historical norms by 30 percent in 2011 and 20 percent last year, he said.
        California, with a population of 38 million, struggled with similar hydropower shortages during the electricity crisis of 2000 and 2001. The state, the world’s ninth largest economy, was also dealing with unplanned power-plant shutdowns, a natural-gas pipeline rupture, unseasonably high temperatures and price manipulation by Enron and other companies.
        ‘Energy Crisis’
        “The high Northwest hydro of last year probably obscured potential operation problems” on the California grid because of lower nuclear generation, Blaha said. “If we move to the other extreme of low hydro, we can move back to an environment like the energy crisis of 2000.”
        The San Onofre generating station, located about 4 miles (6.4 kilometers) southeast of San Clemente, has been shut since January 2012, when workers discovered unusual wear on steam generator tubes in both reactors. Edison International is seeking federal permission to restart one of the reactors on June 1 at a reduced capacity of 70 percent. California’s demand for gas-fired power generation rose 24 percent from January through July 2012 from a year earlier because of San Onofre, according to the Energy Information Administration, the U.S. Energy Department’s statistical arm.

        Natural Gas
        NRG Energy Inc. (NRG), the biggest power provider to U.S. utilities, has been running gas-fired power plants in California two to three times more often than usual because of the shutdown, John Chillemi, the company’s regional president, said during a power conference in San Francisco on Feb. 26.
        Dynegy Inc. (DYN), the third-largest U.S. independent power producer, is seeking to enter new bilateral contracts to operate its gas-fired plants in Moss Landing and Morro Bay this summer, CEO Robert Flexon said in an April 8 interview in Las Vegas.
        The shutdown of the nuclear units in Southern California also eliminates key voltage support on transmission lines, which limits how much power can be imported into the region, Mark Repsher, a Denver-based energy industry specialist at PA Consulting Group, said in a telephone interview.
        Reliability Questions
        “It’ll be tight,” said Frank Wolak, an economics professor at Stanford University and former chairman of California ISO’s market surveillance committee for 13 years. “There could be reliability events that crash the system.”
        Supply constraints on the grid this summer may point to even bigger shortages in the next decade as state environmental regulations force coastal plants to shut while the intermittent power from renewable sources gains, according to UBS AG and Wood Mackenzie Ltd. The California ISO, responsible for delivering power to more than 30 million people, currently has about 60,000 megawatts of generating capacity.

6.61-0.32(-4.62%)May 2 4:00 PMEDT