March 2020 was unprecedented as the world dealt with the outbreak of the COVID-19 virus. Alberta power demand has decreased by 450 MW due to the outbreak, over double the estimate from last week. As a result of the demand destruction, Alberta power prices settled down 29% this week at $38.35/MWh. Monthly settles for March are currently at $42.53/MWh. The forward curve continues to trend downward but will remain volatile.
AECO gas settles were down 7% this week to $1.78/GJ. The summer contract starts tomorrow and with that the Temporary Service Protocol (TSP) will again be in effect. Cash trading is indicating that the TSP remains an effective mechanism. Forward pricing is gaining strength with projections exceeding the $2/GJ mark.
On Tuesday March 31, Alberta Premier Jason Kenney announced a $1.1B USD government equity investment in Keystone XL. The money is expected to fund pipeline construction through 2020. The news is refreshing for many Alberta producers who continue to work through low energy prices.