US spot power prices turn negative in California, Arizona again
June 3 (Reuters) - U.S. spot power prices in California and Arizona turned negative again for Monday, while next-day natural gas prices in northern California fell to their lowest since 2001 amid low demand and ample cheap hydropower and other renewable supplies.
Negative prices signal there is too much power or gas being produced in a region. Energy firms can either reduce output, pay someone to take their power or gas, or, if they can get a permit, flare unwanted gas.
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Next-day power at the Palo Verde hub in Arizona fell to negative $2.50 per megawatt hour (MWh) for Monday, while South Path-15 (SP-15) in Southern California dropped to negative $6.50.
Prices averaged positive $14.75 per MWh at Palo Verde and positive $12.75 at SP-15 for Friday.
U.S. next-day power and gas prices have turned negative several times already in 2024, especially in Texas, Arizona and California.
Next-day power prices at Palo Verde have averaged below zero 19 times so far this year versus just once in the past in 2019. SP-15 prices, which never averaged below zero before this year, have already hit that mark 16 times.
That compares with Palo Verde averages of positive $5.16 per MWh in May, positive $18.38 so far this year and positive $59.03 in 2023, and SP-15 averages of positive $3.56 per MWh so far in May, positive $18.36 so far this year and positive $59.86 in 2023.
In the gas market, next-day prices at the PG&E hub in Northern California fell to $1.56 per million British thermal units (mmBtu), their lowest since hitting a record low of $1.43 in November 2001.
That compares with an average of $2.25 per mmBtu in May, $3.02 so far this year and an average of $6.24 in 2023.
(Reporting by Scott DiSavino; Editing by Aurora Ellis)