After a low-key winter season, regional market prices for natural gas and electricity escalated substantially in February and March.
Spot prices (on-peak) for wholesale electricity at the Mid-Columbia (Mid C) jumped up significantly in February but have since calmed down.
- The average daily spot price for the month of February was over $90 per megawatt-hour, up from $36 in January and $55 in December
- Some daily prices were well over $100 – like the price response during the polar vortex in the late winter of 2014
- So far in March however, Mid C prices have dropped back down to around $48 per MWh
A few factors contributing to the high prices include high demand during a late winter cold spell and natural gas infrastructure constraints. The Bonneville Power Administration released a notice in early March:
Meanwhile, daily spot prices for natural gas at the Sumas hub reached historic highs in February and early March. There are a variety of issues most likely driving the prices, including:
- Strong demand for natural gas because of a very cold and very late winter – this scenario presents a special challenge to the natural gas delivery system by stressing pipeline and storage abilities so late in the heating season
- Continued repercussions from the Enbridge BC Pipeline rupture in October of 2018
- Scheduled maintenance on the southern section of the Enbridge BC Pipeline from mid-February and into March. The capacity on this section of the BC Pipeline dropped by nearly 33 percent during pipeline inspection and maintenance in late February and early March
- The average daily spot price for the month of February was $19.08 per mmbtu, up from $3.54 in January, and even higher than the average monthly price when the rupture occurred
- Daily gas prices at Sumas hit $154 on March 4, dropped down to the $6 range, then jumped again March 11 to $24. In late March, prices are back down in the $3 range
Daily prices at Opal (U.S. Rockies) are also up significantly in February and March
- Spot prices in February averaged $7.15 per mmbtu, up from $ 3.49 in January
- Spot prices in March have since reverted to $3.64
Prices at the AECO hub remain low in the $2 range.
The current market price situation resembles the time of the polar vortex in 2014, when another late winter cold snap caused high demand and drove up natural gas and electricity demand. That cold spell also caused “freeze-off” supply disruptions to gas coming from the U.S. Rockies. In 2019, the natural gas supply disruption is related more to the Enbridge BC Pipeline issue.
For more information on the natural gas system in the Northwest, please see these two recent presentations:
Natural Gas Pricing Hubs
Sumas is a pricing point for natural gas that is coming south from British Columbia to the westside of Washington and Oregon
Opal is a pricing point for natural gas coming west from the US Rockies basins in Wyoming, Utah, Colorado to the eastern side of Oregon, Washington, as well as Idaho
AECO hub is a pricing point for natural gas coming south from upper British Columbia and Alberta down to Washington, Oregon, Idaho, and California