This spring, as Californians enjoyed their famously pleasant sunny weather, implied heat rates averaged below 4.0. With heat rates that low, the Pacific Northwest and Desert Southwest reduced the power being sent to California. During the summer months, however, the load profile is high enough during the middle of the day that both imports and less expensive natural gas units within California are needed to balance the grid. That means that the impact on gas demand can really swing widely during the day, depending on the season.
There are so many story lines here. I see them as great news for natural gas; the Midcontinent fuel fossil story; and, investors if they pay attention.
I see really, really bad news for utilities if they don't get a handle on this, and hydroelectricity. Nuclear energy in California is already dead.
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