Western Price Survey / Archives
January 7, 2005
Traders were back at their desks the first Monday of the year. Price movement in the day-ahead markets in the West followed a familiar pattern during the first half of this week--gains were recorded as the week wore on, with Wednesday power exchanges topping the spread. The weather, though wet and cool throughout California and downright chilly in the Northwest, has not played as large a role in price movement as would have been expected. This is due to the plethora of available generation and a lag in demand.
The return to service of all of California's nuclear units also served as a damper on the price of gas-fired power this week. By the end of the week both units at Diablo Canyon were running at 100 percent output, following a dip in generation from Unit No. 1 on Thursday. The 1,100 MW unit was ratcheted down to 50 percent for planned main-tenance that day. All three units at the Southwest nuclear facility at Palo Verde are also operating at full power.
Southern California Edison's San Onofre Nu-clear Generating Station Unit No. 3, which has been on an extended refueling outage over the past couple of months, began ramping back up last week. The process has been deliberate, with the 1,108 MW unit hovering at 70 percent output for the week as operators at the fa-cility conduct testing on the facility's main feed water pumps. Unit No. 3 could be up to full power as early as this weekend, said Edison spokesperson Ray Golden. SONGS Unit No. 2 continues at 100 percent output.
While consumers may be ratcheting up their use of natural gas to heat homes and businesses during this cool spell, the demand for electricity in the California Independent System Operator territory has not moved much this week, hovering near the 32,000 MW mark.
The only real nod to the weather can be seen in deals at Mid-Columbia, where usually sluggish power prices managed to keep up with the California elec-tricity costs fairly well. After opening on Monday at between 47 mills and 54 mills/KWh, peak-power costs at Mid-C gained nearly 10 mills over the following two days before falling off in typical fashion in antici-pation of the weekend drop in load. Trading closed on Friday in the range of 52.50 mills and 57.50 mills/KWh.
Off-peak prices at Mid-C did not demonstrate the same amount of enthusiasm as peak prices this week. The price for low-demand power stuck close to the 45 mills to 47 mills/KWh mark for most trades.
Moving south, the price of peak power at the Califor-nia-Oregon border attracted as much as 65 mills/KWh at midweek, up from a range of 51.50 mills to 55 mills/KWh on Monday. COB power lost ground at week's end, drop-ping to between 55.50 mills and 59 mills/KWh. The price of off-peak power at the hub mirrored that at Mid-C, opening the week between 43.50 mills and 46 mills/KWh before rising to 48.75 mills/KWh for Friday exchanges.
With much of the state experiencing similar damp weather, there was little spread between Northern and Southern California prices this week. North of Path 15, daytime power traded for a low of 51.75 mills/KWh on Monday and swelled to a high of 66.60 mills/KWh by Wednesday before fading to between 59.50 mills and 61.75 mills/KWh at the end of the week. SP15 peak power played out at a low of 51 mills/KWh Monday and also closed out the week at 61.75 mills/KWh. Off-peak prices in both regions ranged from about 37 mills/KWh to 48 mills/KWh in the first half of the week before slipping to about 45 mills/KWh on Friday [Shauna O'Donnell].
Gas Fundamentals Lack Verve
Natural gas costs traveled on a slow incline for much of the past five days, gradually leveling out as the week drew to a close. Prices at the producing basins of Permian and San Juan opened Monday just below the $5.00 mark, with Permian at about $4.95/MMBtu and San Juan closer to the $4.90/MMBtu level. By Wednesday, the price spread at Permian ran from $5.50 to $5.60/MMBtu, dip-ping down to $5.30/MMBtu by Friday.
Pacific Gas & Electric's CityGate hub recorded the highest prices of the week, topping out at $6.04/MMBtu at midweek. The closing price on Friday was not much lower, ranging from $5.92 to $6.02/MMBtu.
Natural gas futures prices for February deliveries went on a rollercoaster ride this week across the na-tion. Unimpressed with a warmer-than-normal weather forecast for the eastern half of the country, prices dipped early in the week, dropping by nearly 36 cents on Mon-day and settling at about $5.79/MMBtu. Better news came for traders at the end of the week, when prices rose on the tails of a hike in the price of crude oil. With crude gaining more than $2.00 in Thursday trading, February gas managed to move as high as $6.04/MMBtu [S. O'D.].
Archives of the Western Price Survey for the past year are also available online.
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