Western Price Survey / Archives
January 14, 2000
Power prices in the Desert Southwest did not rise much in response to outages at Palo Verde nuclear Unit No. 2 and Four Corners coal-firmed station No. 4. But now that the units have returned to service, it is evident that regional prices were elevated by the outages. Prices at both Palo Verde and Four Corners hubs fell from about 33 mills to 26.5 mills/KWh in late Thursday trades. Part of the reason was that deals were for weekend deliveries in advance of the Martin Luther King, Jr. semi-holiday (observed in some states and not others), but also contributing to the decrease was assurance that PV No. 2 would be back online as projected and the Four Corners outage that began Wednesday was only temporary.
By Friday morning the nuclear unit was up to 99 percent of capacity, according to the Nuclear regulatory Commission.
Prices at others hubs in the West also slipped, but not quite as far. Mid-Columbia dropped to 25.5 mills to 27 mills/KWh for Saturday/Sunday packages and California/Oregon Border prices stepped down to about 28.5 mills to 29.5 mills/KWh, traders said.
Price motion during the week was fairly minor, with bilateral trades mostly following the California Power Exchange's lead. While many schedulers thought that the week's transmission constraints and scattered unit outages might otherwise have caused a price run-up, that really did not occur because of warm temperatures in the Southwest and Southern California.
Even though a blanket of snow and near-freezing rain over the Pacific Northwest pushed natural gas prices higher in Canada, it had little impact on power prices. Mid-Columbia trades were reported over a broad range from 26 mills to 29 mills/KWh early on; they tended to center at 28.5 mills/KWh on Wednesday for daytime deliveries on Thursday and Friday. There was not really much of a discount for off-peak power, which was reported at 23.5 mills to 24 mills/KWh at Mid-C. Forecasters were heartened by the falling snow in the Northwest and California mountains.
The Cal-PX bounced around between 34 mills and 37 mills/KWh for peak deliveries and between 27.26 mills and 30.4 mills for overnights.
Not everyone could get into California, with the southbound California/Oregon Intertie derated to 3600 MW through Thursday as Bonneville Power Administration replaced the transmission tower that fell victim to vandalism before New Years.
In central California, critical Path 15 curtailed to 1000 MW on Thursday because of maintenance.
The Alberta Power Pool hit a firm load alert midweek, as loads reached nearly 7200 MW and prices spiked to 747 mills/KWh during the evening peak. Thursday pricing was not so harrowing, however, returing to the 46 mills to 69 mills range/KWh. Off-peak reflected the cold nights in Alberta, where temperatures fell well below zero and even daytime temperatures were on the south side of freezing [Arthur O'Donnell] .
Gas Prices Lift Toward End of Week
Except for Alberta hub prices, which jumped early in the week on cold weather, natural gas prices showed little movement until the very end of trading on Thursday. Even then, the upward lift reported in the Southwest was mostly felt in the Permian Basin in response to increasing demand from Midwestern markets rather than Western loads. "Nothing exciting today," reported one marketer group.
While Permian and San Juan Basin prices had been comparable all week in the $2.13 to $2.17/MMBtu range, the Texas supplies were drawn up to $2.19 in late trading. Southern California Border prices barely moved at all, hanging in the $2.36 to $2.39/MMBtu range all week.
Northwestern demand was higher on cold and wet weather, but traders explained the lack of price movement for Rocky Mountain supplies was caused by the fact that pipelines were already loaded. In California, utilities became sellers rather than buyers as the border spot market prices moved slightly above the benchmarks that gas sellers use to determine their regulated "incentive" profits.
Alberta hub prices began the week at a relatively low $(C) 2.65/Gigajoule but popped up to $2.82 on Thursday, ending up at $2.77/Gj by Friday morning's report [A. O'D.].
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