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Western Price Survey / Archives

January 10, 2003
Market Makes Load a Lesser Concern

Prices in bilateral markets continued to resist low electric demand around the West this week, aided in part by forecasts of colder weather and strong fuel prices for gas-fired generation. San Onofre Nuclear Generating Station No. 3 shut down for planned repairs, which might have helped keep prices steady but did not send them racing.

Premiums for off-peak energy at Mid-Columbia were unusually strong, rising as high as 38 mills/KWh for some trades midweek. Traders said that line derations on the Idaho transmission system probably contributed to the increase, as power that is routinely moved across Idaho and into the Northwest couldn't get there. Many market players were purchasing off-peak power out of the Southwest and selling it into Washington and Oregon, according to traders.

"There was an abundance of sellers out there this week," one trader remarked. "We had no trouble buying."

In the Northwest, a slight decrease in temperature and light snow flurries are expected for the weekend -- but not rain, the result of which could mean reduced inflows in area reservoirs, said one market insider. Forecasts also show a smattering of snow falling in the Sierra Mountains on Friday and Saturday.

On the California Independent System Operator grid, demand held in the 30,000 MW to 30,500 MW range. Unplanned generation shutdowns amounted to 1,210 MW to 1,444 MW of lost capacity.

Among the outages listed was Duke Energy's 337 MW Morro Bay No. 3 unit. According to Duke spokesperson Pat Mullen, a turbine rotor at the plant began experiencing high vibration in mid-December, causing continual shutdowns that have extended to the present week. Duke is still investigating the problem and has not yet estimated when the unit will ramp up.

The company's other Morro Bay plants -- No. 1 (163 MW) and No. 4 (336 MW) -- are also off line, undergoing scheduled maintenance.

At the SONGS complex, No. 3 clicked off at noon on Monday for a scheduled 45-day refueling and maintenance outage. The 1,100 MW units require refueling every 20 months or so, according to plant spokesperson Ray Golden; SONGS No.2 was refueled in May 2002. Maintenance activities at unit 3 will include inspection of the unit's steam generator tubes and reactor vessel head.

Other plants that were unexpectedly idle this week included Huntington units 1 and 5, with a combined 238 MW of capacity curtailed out of a total 348 MW, and Duke's 175 MW South Bay No. 3 unit.

Most Western hubs saw peak-hour prices step into the 40 mills/KWh range. Prices at Mid-C crawled between 35 mills and 36 mills on Monday before surging to 41.25 mills/KWh later in the week. At the California-Oregon border, peak prices mostly stayed between 39 mills and 41 mills, reaching a high of 41.5 mills/KWh.

NP15 prices ranged as high as 48 mills for heavy-load hours, with SP15 commanding as much as 48.25 mills/KWh. In the Southwest, prices at Palo Verde topped out at 41 mills/KWh.

Activity at Canada's Alberta power pool appeared calm, with loads ranging from an off-peak low of 6,353 MW to a high of about 8,249 MW during the evening. Early Friday morning, off-peak prices spiked to 147.89 mills, and power for the 7 am hour traded for 343.25 mills/KWh as colder weather pushed loads higher [Jason Mihos].

Withdrawals Step on Gas Supply, Boost Prices

Gas markets rolled on this week, encouraged by reports of lower gas stocks and the possibility of upcoming climate chills. NYMEX futures contracts for February and March rallied late in the week in response to cold-weather forecasts, and prices at Western hubs ticked up in turn.

Though prices did not rise dramatically during the past several days, they have come a long way in the course of a year. On average, spot gas prices in the West have more than doubled since 12 months ago, when many hubs were trading in the low- to mid-$2/MMBtu range.

According to figures released this week by the federal Energy Information Administration, national gas stocks were beset by another net withdrawal last week. As of January 3, gas in storage totaled 2,331 Bcf, which is 86 Bcf lower than figures for the previous week and 459 Bcf lower than the same period for the previous year. Western gas showed a withdrawal of 11 Bcf compared to the previous week and is still 49 Bcf above its five-year average storage total of 293 Bcf.

Gas at CityGate pressed up to $4.91 after moving between $4.55 and $4.65/MMBtu early in the week. Malin supplies traded for $4.12 to $4.49/MMBtu. Permian Basin gas outperformed its counterpart at San Juan, rising to $4.57 compared to the latter's $4.42/MMBtu.

At the Southern California border, prices roved from $4.38 to $4.65/MMBtu. Canadian gas as reported at the AECO hub bottomed out at about $4.02 and rose as high as $4.29/MMBtu [J. M.].

Western Electricity Prices
Week of January 6-10, 2003
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 18.27-343.25 10.19-147.89
Mid-Columbia 35-41.25 28-38
COB 38.75-41.5 29.75-35.7
NP 15 39.75-48 28.75-38.5
SP 15 40.75-48.25 24.5-30.25
Palo Verde 36.5-41 21-30.5

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


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