Western Price Survey / Archives
January 19, 2001
One of the primary pricing points for wholesale power trading has lost nearly all relevance during the current electric crisis. Volumes of power cleared on the California Power Exchange dropped so far that clearing prices seen on the day-ahead market no longer bear relevance to traders. Volumes had already plummeted after the Federal Energy Regulatory Commission's December ruling allowing California's utilities to directly match their own generation resources against load, without going through the exchange's auction process.
But beginning with Friday's trading day, volumes dropped even further as the Power Exchange suspended Pacific Gas & Electric's trading privileges because of creditworthiness problems. Southern California Edison is almost sure to follow, though it had won a temporary reprieve from federal regulators earlier in the week.
Volume for Friday, January 19, dropped to merely 29.8 GWh for the day, where it had been in the 82 GWh to 120 GWh range previously. That is about the load needed to meet a single peak hour in the state. Only about 1,600 MWh was cleared for the peak period and there were no transactions at all on the day-of market. On a normal day, CalPX would have been clearing about 500 GWh given current demand.
Consequently, while it appeared that CalPX prices were falling, the daytime clearing price of 154 mills/KWh was no real indicator. Prices earlier in the week had reached 680 mills at peak and 555 mills/KWh for off-peak; while closer to bilateral prices, it was clear that regional hubs were following other pricing patterns.
To a large degree, it was "power at any price" for those caught short. Most utilities, however, said they were trying to keep within their own resources, or sell to Cal-ISO or the Department of Water Resources to help meet California's crisis.
By Thursday, prices in the West covered a huge range, from 400 mills to 600 mills/KWh for daytime energy. Because cold weather was driving loads to unusually high levels in the Southwest, Palo Verde was at the top tier of pricing. Mid-Columbia and the California/Oregon Border topped out at 550 mills/KWh, although real-time prices were quoted as high as 750 mills/KWh.
A huge list of unit outages is still plaguing schedulers at Cal-ISO, which reported 11,500 MW unavailable Thursday [Arthur O'Donnell].
Gas Prices Fall Despite Power Emergency
Perhaps it was because of the loss of so much gas-fired generation, but prices at major hubs and basins eased this week even as electric markets went crazy. That does not mean the gas market has no problems, in fact, a crisis of deliverability looms.
Delivery curtailments to power generators in the San Diego area pushed operators at Encina and South Bay into oil-burning mode beginning Tuesday. San Diego Gas & Electric cited record demand for gas as the cause of the cuts, but the curtailments lasted even longer than first expected. SDG&E said 659 MMcfd of deliveries on Tuesday marked an all- time record. SoCal Gas had a 5.1 BCfd draw, not quite up to the level of the 5.3 Bcfd record set in December 1990.
Meanwhile Pacific Gas & Electric was drawing heavily from storage as more suppliers informed the utility they will not sell on credit.
As for prices, Topock dropped from $10.80/MMBtu mark on Tuesday to about $10/MMBtu Thursday. Basin prices were also seen on a downward trend, dropping from about $8.67/MMBtu earlier in the week at both San Juan and Permian, to the $8.25 to $8.32/MMBtu range.
In Northern California, both Malin and CityGate slipped to the $9.50 to $9.75/MMBtu range Thursday.
Trading was reported very light at the Alberta hub, and prices dropped from $(C)10.73 to $9.60/Gigajoule [A. O'D.].
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