Heavy rain, high winds cut off US West Coast power customers, weakening demand

More than 65,000 electricity customers on the West Coast remained without power as of 4 pm ET Dec. 28 in the wake of a violent storms that cut power Dec. 27 to more than 210,000, reducing power flows and wholesale power prices in the region.

Heavy rain and winds gusting to 70 mph the night of Dec. 26-27 brought flash flooding, knocked down trees, caused motor accidents, and tore down power lines in Oregon and other parts of the Pacific Northwest on Dec. 27, according to news reports.

As of 5:30 pm ET Dec. 27, Oregon had 168,191 electricity customers offline, Washington had 31,763 and northern California had 16,822, according to PowerOutage.US.

The peakload on Dec. 27 in the Bonneville Power Administration, which serves as balancing area administrator for much of the Northwest, fell from the Dec. 22 high of 11 GW to less than 6.2 GW on Dec. 27, well below the previous five-year minimum of 7.5 GW for that date, before rebounding to 8.8 GW Dec. 28. The peakload of the previous Tuesday was 9.5 GW.

In the California Independent System Operator, the Dec. 27 peakload was 27.7 GW, up from 26.2 GW Dec. 26 but below the five-year average of 28.4 GW and the previous Tuesday's peakload of 28.7 GW.

Triple-digit power prices

Prices across the West Coast have been extraordinarily high this year, largely driven by natural gas prices. S&P Global Commodity Insight's assessed Mid-Columbia day-ahead on-peak bilateral indexes have averaged $295.13/MWh so far in December, compared with $57.62/MWh in December 2021.

The Mid-C day-ahead on-peak index for delivery Dec. 27 was $200.28/MWh, compared with $355.53/MWh for the previous Tuesday. The Dec. 28 Mid-C package was assessed at $214.64/MWh, and Intercontinental Exchange trading on Dec. 28 for Dec. 29 delivery had prices around $222.50/MWh.

In CAISO, NP15 day-ahead on-peak locational marginal prices have averaged $283.92/MWh so far this December, compared with $65.46/MWh in December 2021.

NP15 day-ahead on-peak locational marginal prices averaged $309.52/MWh for Dec. 27 delivery, compared with $327.45/MWh the previous Tuesday. NP15 on-peak LMPs for Dec. 28 delivery averaged $221.52/MWh, and ICE trading Dec. 28 for Dec. 29 delivery had prices around $200.

At the Pacific Gas & Electric Malin price point, spot gas has averaged more than $30/MMBtu so far this December, compared with $5.40/MMBtu in December 2021. In contrast, Henry Hub spot gas has averaged $5.827/MMBtu through Dec. 28, compared with the December 2021 average of $3.715/MMBtu.

The main drivers of the high gas prices are low storage, elevated early winter demand, and the West Coast's remoteness from major gas fields has caused the big spread from Henry Hub, according to S&P Global analysts.