The Dalles Dam water supply forecast has again fallen to the lowest point of the season as summer forwards across the US West continue to set records amid supply concerns and near-term packages trend higher on an upcoming heat wave.
The Dalles water supply forecast was at 83% of normal for the April-September forecast period, down 2 percentage points from a month ago and 22 points below year-ago levels, according to Northwest River Forecast Center data. Likewise, the Shasta Dam water supply forecast was at 42% of normal for the April-July period, according to California Nevada River Forecast Center data.
Less expected water supply at dams translates to less hydro generation available to serve electricity demand as hydro accounts for a majority of the fuel mix in the Pacific Northwest this time of year, following the spring snowmelt and runoff into reservoirs where water is kept to use for hydro generation. Bonneville Power Administration's hydro generation fell 10 percentage points day on day to 71.2% of the total fuel mix for June 22, 17 points lower year on year, as wind generation's share jumped from 2% to 11.9% day on day, according to BPA data.
Excess power generation in the Pacific Northwest is exported to neighboring regions, such as California. California Independent System Operator imports have averaged 18.4% so far in June, down nearly 6 points from the June 2020 average, according to ISO data.
West heat waveIn mid-June a heat wave blasted the region, sending spot power prices as high as $1,575/MWh June 17 at Palo Verde, according to S&P Global Platts pricing data. The region also faces widespread drought and wildfire risks.
Cal-ISO, which ordered rotating outages in August 2020 for the first time since 2001, issued its first Flex Alert of the season in mid-June.
"We know from the prolonged Western US drought that resource conditions are deteriorating," ISO President and CEO Elliot Mainzer said in a statement June 21. "At Lake Oroville, for example, the state's second-largest reservoir, water levels are about a third of capacity. The California Department of Water Resources has said the water could be so low in a few months that the Butte County reservoir's hydroelectric generating plant may be forced to shut down for the first time."
Hydro operators are doing all they can to preserve water and stretch supplies as far as possible, but another extremely dry year is hindering water supplies and electricity generation across the West, Mainzer added.
Inflows at The Dalles are down 30.3% year on year to average 209.9 kcfs so far in June, according to US Army Corps of Engineers data. Lower inflows into the reservoir have pulled generation at The Dalles down 22.8% year on year to an average of 773.13 MW for June 1-15.
While the region has seen some relief from the above-normal temperatures in recent days, the 10-day forecast indicated greater chances for above-normal temperatures, according to the US National Weather Service.
"It's going to be extremely hot for an extended period of time," BPA's Tony Norris said during the June 23 Technical Management Team call.
Power prices climbingThe Mid-C on-peak balance-of-the-month traded at $250/MWh on the Intercontinental Exchange as off-peak balance of the month traded at $150/MWh. In comparison, Mid-C spot prices have averaged about $61.75/MWh so far in June, 494% higher year on year, according to S&P Global Platts pricing data.
Likewise, SP15 on-peak balance of the month traded at $145/MWh, while NP15 on-peak balance of the month traded at $150/MWh. In comparison, SP15 spot has averaged about $52.25/MWh so far this month, 138% higher year on year, while NP15 has averaged nearly $52.50/MWh, 121% higher, according to ISO data.
Palo Verde on-peak balance of the month traded at $225/MWh on ICE. So far in June, Palo Verde spot has averaged around $167.25/MWh, 320% higher year on year, according to Platts data.
In power forwards, Mid-C on-peak July is 582% higher than its 2020 counterpart was a year ago and is up from 322% at the beginning of the month, while on-peak August is 426% higher than the 2020 package last year, according to Platts data.
SP15 on-peak July is 304% higher than its 2020 counterpart a year ago, while the August package is 294% higher and Palo Verde on-peak July is 482% higher than the 2020 package a year ago, while the August package is 406% higher.
