The Regional Portfolio Model (RPM) requires a forecast of natural gas prices, as delivered to regional power plants. Generating resource costs are a key decision factor for RPM, and the delivered fuel price for natural gas power plants can be a significant cost component for electricity generation from gas. The price forecast time series (quarterly) includes:
- East Side – Medium, Low and High
- West Side – Medium, Low and High
A new delivered price to power plants model was developed for the 2021 Power Plan to produce this forecast. See section Delivered Fuel Price Model for Northwest Gas Power Plants for more information.
The delivered price model develops the relationships between recent regional power plant fuel purchase costs, regional gas hub prices, and regional pipeline transport charges. The model was set up with historic data. To produce a forecast of future delivered prices, the gas hub price forecast (1.1.3) is fed through the model to calculate future prices for the East and West side power plants.
Essentially, the RPM gas price forecast boils down to this:
- The East-Side Price Forecast is composed from a mix of AECO and Opal gas hub prices and a mix of transport charges on the GTN Pipeline and the Northwest Pipeline.
- The West-Side Price Forecast mostly the Sumas hub price with transport costs from Northwest Pipeline
The forecast for delivered gas prices to power plants for RPM is available here.