Western Price Survey
January 6, 2006
Northern and Central California businesses and residents are wringing out the water from homes and offices this week. The deluge hit over the New Year's Day long weekend, leaving in its wake flooded towns, saturated ground and tired utility workers. More than 1 million Pacific Gas & Electric customers were affected by the storms, and the utility reported damage to 430 transformers, 500 poles and close to 300 miles of power lines. By Wednesday, PG&E reported that it had restored service to all but a small number of customers, most of whom were in the Humboldt and San Luis Obispo regions.
Despite the soggy weather, temperatures in the Western coastal states were fairly mild during the past week. This fact, combined with lower holiday-driven demand, conspired to put downward pressure on power prices. Some Northwest off-peak prices were hardly recognizable, seeing as they were in the twenties and thirties. Just before the Christmas holiday, nighttime power traded for as much as 78 mills/KWh at the Mid-Columbia hub.
During the first half of this week, off-peak prices at Mid-C ranged from 29 mills to 47.50 mills/KWh. Peak-time power changed hands at the hub for between 62 mills and 68 mills/KWh this week. At the end of the week, off-peak prices took a turn upward, closing out between 55 mills and 59.50 mills/KWh for next-week deliveries.
California-Oregon border daytime power attracted between 64 mills and 70 mills/KWh on Tuesday, the first day of trading this week on account of Monday's New Year's Day holiday. By Friday the price of peak-time power had slipped a few mills, trading for between 66 mills and 67.50 mills/KWh. Off-peak power drew between 37.75 mills and 46 mills at COB in the Monday-to-Thursday period, but ran up as high as 59 mills/KWh on Friday.
Power costs in the Southwest appear to be unaffected by the closure of the Mohave Generating Station. Southern California Edison, the operator and majority owner of the facility, shut down the two 790 MW units at the plant December 31, as previously scheduled. The utility has estimated the facility will be shuttered for up to four years for emissions-related retrofitting.
Palo Verde peak-time power changed hands for between 66 mills and 68.50 mills/KWh on Tuesday before dipping down to between 62.50 mills and 65.75 mills/KWh the rest of the week. Off-peak power moved for between 36.50 mills and 44 mills/KWh early in the week before bumping up as high as 57 mills/KWh on Friday.
In Southern California, daytime power drew as much as 75.50 mills/KWh at the start of the week. The price fell to between 71 mills and 73.25 mills/KWh on Wednesday, showing no ill effects from the closure of the San Onofre Nuclear Generating Station Unit No. 2. The 1,122 MW-capacity power plant went off line early in the week for refueling. It is expected to return to service in the latter part of March.
Off-peak power south of Path 15 opened the week trading for between 40 mills and 45 mills/KWh. On Friday the price for nighttime power at SP15 ranged from 57 mills to 60.50 mills/KWh.
North of Path 15 power kept in step with Southern California values this week. NP15 peak power topped out at 75.50 mills/KWh on Tuesday before losing a bit of ground and ending on Friday at a range of 70.50 mills to 71.50 mills/KWh. Off-peak power at the hub hit a high of 47 mills/KWh on Wednesday, after opening the week trading for between 40.50 mills and 45 mills/KWh.
Energy Northwest ramped down the Columbia Generating Station by about 40 percent at midweek for planned maintenance. The 1,157 MW nuclear facility is currently generating 682 MW [Shauna O'Donnell].
A Lull Recorded in Gas Costs
Who would have thought that in the middle of winter there would be an injection, not withdrawal, of natural gas into underground storage facilities. While the Energy Information Administration reported 12 Bcf put into storage in the producing areas and 8 Bcf into Western storage for the week closing December 30, the net injection was 1 Bcf on account of a 19 Bcf withdrawal in the East.
Nevertheless, with the storage figure in the black, there was little momentum to boost prices this week. While costs did not sink notably, they remained markedly less volatile than in prior weeks.
After opening the week trading for between $8 and $8.40/MMBtu, gas deliveries to the Southern California border dipped to between $7.68 and $7.90/MMBtu by Friday. At the Malin hub in Northern California, gas moved for a high of $8.75/MMBtu on Tuesday. A steady decline was recorded the rest of the week and trading closed out on Friday at between $8 and $8.10/MMBtu [S. O'D.].
Archives of the Western Price Survey for the past year are also available online.
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