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Western Price Survey

Week's End Edition
January 8, 2010
Power Prices Dip on Lower Demand, Mild Temperatures

Peak Western electricity prices fell slightly this week on falling demand and temperate weather, though off-peak prices held mostly steady.

Power prices had little help from natural gas this week. After posting increases of as much as $1.56/MMBtu through Thursday, spot prices for Western natural gas returned on Friday to levels seen at the week's start. Friday spot prices spanned from $5.73/MMBtu at Malin to $6.05/MMBtu at PG&E CityGate.

Natural gas futures on Nymex followed the same trend this week, hitting $6/MMBtu on Wednesday, the highest point in 12 months, before falling back to $5.73/MMBtu on Friday.

Wintry weather and the possibility of tighter supplies had helped boost prices earlier this week despite a storage glut, but prices fell Friday after release of the weekly storage report and forecasts for relatively mild weather over the weekend and next week in California and the Northwest.

Since Monday, daytime California prices dropped more than $3 to settle at an average of $51.01/MWh at North of Path 15, and were off nearly $1 to $51 at South of Path 15. Average trades for nighttime power increased almost $1 in the north to $43.78/MWh, and $3 in the south to $42.79.

Palo Verde prime values gave back more than $2 to average $47.18/MWh. Average off-prime trades increased $1 to $37.98.

While much of the country has been hit with snow and ice and heating demand has ramped up this week, the West has largely been enjoying relatively mild weather. Peak power demand in California fell from 30,500 MW on Monday to 29,500 MW on Thursday and was projected to dip to 27,600 MW on Friday, the California Independent System Operator said.

California will see mostly sunny skies and mild weather through early next week, with temperatures in the low 70s in Los Angeles and the high 50s in San Francisco, according to the National Weather Service. Phoenix will see temperatures in the high 60s through Monday.

At the California-Oregon border, daytime prices dipped almost $4 to average $48.89/MWh, and nighttime trades fell about $1.50 to $41.96.

Average Mid-Columbia peak trades declined more than $4 to $45.53/MWh, while off-peak values were down $1 to $41.18.

It's rain and more rain in the Northwest through Tuesday. The weather will warm into the low 50s in Portland and Seattle, the National Weather Service said.

Natural gas prices were initially given a boost by frigid weather and a larger-than-expected drawdown in stockpiles last week.

A blast of wintry weather last week sent natural gas storage down by 153 Bcf to 3.123 Tcf, according to the U.S. Energy Information Administration. In the same week last year, 61 Bcf was withdrawn. Still, stockpiles are 10 percent above last year and 11 percent above the five-year average.

In the West, working natural gas in storage dipped 19 Bcf to 434 Bcf; storage now stands 11.3 percent higher than last year and 14.8 percent greater than the five-year average.

On Wednesday, crude-oil prices for February closed at $83.18, a 15-month high. But profit-taking and bigger-than-expected job losses in December sent oil prices to $81.80 a barrel Thursday, near Monday's close. On Thursday it was announced that the U.S. lost 85,000 jobs last month, according to the Labor Department, a larger number than analysts expected. But November numbers were revised to show a gain of 4,000 jobs, raising hopes that a recovery was under way.

On Friday, however, oil prices inched higher, closing at $82.75.

The San Onofre Nuclear Generating Station's 1,070 MW second unit is closed for the replacement of its two steam generators. The 1,150 MW Columbia Generating Station in Washington state, meanwhile, has been operating at 75 percent capacity since Thursday, and no reason has been given for its drop. Calls to the plant were not returned [Kristina Shevory].

Western Electricity Prices
Week's End: January 4 - 8, 2010
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 23.26-60.77 12.72-47.85
Mid-Columbia 44.50-54 39-44
COB 48.50-54 40-44.25
NP 15* 50.80-56.50 38.75-44.50
SP 15* 50.50-58.50 37-43.25
Palo Verde 46.50-55 32.50-40.50

* Prices represent both day-ahead locational marginal prices (financial swaps, or EZ Gen DA LMPs) and quasi-swap prices (EZ Gen) as reported by ICE.

Archives of the Western Price Survey for the past year are also available online.

The Western Price Survey is excerpted from Energy NewsData's comprehensive regional news services. See for yourself how NewsData reporters put events in an accurate and meaningful context -- request a sample of either or both California Energy Markets and Clearing Up.

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Contact Chris Raphael, editor with questions regarding Price Survey Content.

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