Western Price Survey / Archives
January 11, 2002
Western power markets calmed to the point of sedation this week, with peak prices falling below 20 mills/KWh throughout the region and some off-peak transactions coming in the single digits. Smooth jazz played over the telephone hold lines as power traders searched for their sheets to describe light activity and fragmented purchasing patterns.
With loads falling below expectations each day and plenty of running water, buyers could afford to be choosy and sellers dealt in whatever they could.
"We call it Sanford & Son around here," one scheduler joked. "We're dealing in pieces of garbage." For example, off-peak blocks at the California/Oregon Border were split into less than full packages to move at as low as 9 mills/KWh.
The heavy rains of the past few weeks have abated somewhat, but power prices were pulled lower as the week wore on. Low gas prices contributed to the market dynamic, or were the result of hydroelectricity creeping onto the margin.
The California Independent System Operator's daily peaks fluttered around the 31,300 MW mark, but actual peaks came in lower than forecasts each day. Despite 12,000 MW of in-state generation reporting offline for maintenance, there was little concern about resource availability generally. More than 10,000 MW of that was pre-planned outages, according to cal-ISO reports.
An area of local concern might be in the San Francisco Bay region, where nearly 1,500 MW of units at Pittsburg are out of service and a Potrero unit continues to call in sick. Pittsburg No. 7 dropped off line January 3, but has been reclassified as a planned outage since Saturday.
Abrupt outages at the 740 MW Colstrip No. 3 in Montana, 1,330 MW at Four Corners Nos. 4 & 5, were reported last weekend. Though the Four Corners units returned on Monday, Unit No. 5 had a repeat of condenser tube leaks, so was taken out of service in advance of an outage planned for next Monday.
In the Northwest, Bonneville Power Administration meanwhile offered 100 MW at market prices during the daytime. Early in the week it also had 100 MW of off- peak power for sale, but withdrew that in favor of restocking its reservoirs.
Mid-Columbia peak power was down to 15.5 mills/KWh on some minor derating of the California/Oregon Intertie. COB slipped to 17.5 mills while NP15 barely clung to 18.5 mills and SP15 dropped to 19 mills/KWh.
Palo Verde had been just 20 mills to 21 mills/KWh all week, but gravitated to 17 mills/KWh heading into the weekend.
Off-peak energy was extremely low in both the Southwest at 13.5 mills and in the Northwest at 12 mills to 13 mills/KWh, traders said. The in-state California price slipped to 15 mills for whole blocks but less for partial packages.
The Alberta Power Pool has had generally low prices, but quite a bit of local transmission problems. One line shorted due to heavy fog and the city of Calgary had capacitor problems. Though the pool price spike to as much as 133 mills/KWh Tuesday, it returned to 30 mills to 41 mills/KWh range [Arthur O'Donnell].
Gas Taken for a Ride
Natural gas was definitely not in the driver's seat this week, but was more like an innocent bystander as market forces floated prices up and down in a limited range on the low end of the scale.
As low as prices were, some saw a continued downward trend to try to recapture some power generation load. "There's still some air under these prices," said one dealer. "I wouldn't be surprised to see them go lower by the weekend."
With $2/MMBtu the centerpost of the merry-go-round, basin prices dipped below the mark on either side of a brief rise midweek. The SoCal Border price roamed between $2.10 and $2.21, largely following the trends set by the NYMEX screen.
Although national markets tried to stage a rally midweek on the AGA's report of 190 Bcf withdrawal from storage, the party pooped out quickly and forward prices as well as balance of month contracts joined the dailies in seasonal depression.
Malin climbed to a peak of $2.13 but gave much of that back, while the PG&E CityGate collapsed to $2.12 from a high of $2.21/MMBtu.
In Alberta, the failure of cold weather expectations drove prices lower to $2.97/Gigajoule by the end of the week [A. O'D.].
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