I. Hubs/System Level

Average Prices

On an ATC basis, CAISO average system level prices nearly doubled from 2021 (excluding Winter Storm Uri) to $80+/MWh. Prices were particularly elevated in December, when California natural gas price benchmarks breached $50/MMBtu on account of low local storage levels and pipeline constraints.

Volatility

Both RT and DA volatility (2 hour cumulative top-bottom spreads shown below) increased significantly over 2021 excluding Uri, as higher natural gas prices, a summer heat wave in Aug/Sep, recovering average load trends, and increased renewable deployments all contributed to higher intraday price volatility. The declining RT volatility trend of the past several years witnessed a stark reversal, with a rebound back up to 2018 levels. DA top-bottom spreads, strongly tied to natural gas prices, set new records.

II. Regional Observations

Average Prices

Despite CAISO average hub prices changing significantly from 2021 (excl Uri) to 2022, regional relative price trends were relatively stable. The highest average DA prices (red nodes) were generally in Northern California and along the Northern and Southern Coasts, and lowest average prices (blue nodes) were in the San Joaquin Valley and Desert Southeast.

Volatility

RT volatility metrics broadly increased across CAISO in 2022 versus 2021 excl Uri. In 2022, the Central Valley and the greater San Diego area remained the relatively higher volatility areas within CAISO, as in 2021 (red nodes). Summer volatility in the Central Valley was once again especially high compared to the rest of California.