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Western Price Survey

Week's End Edition
January 19, 2007
Wild Weather Takes Prices on a Ride

In the realm of electricity prices, it has been an odd, roller-coaster week. The West started it off in the grip of a vicious cold front that caused $1 billion in damage to the California farming industry and covered Seattle in snow for several days. Malibu even got a dusting of snow for the first time in 20 years.

Another cold front is on its way to California's Central Valley, which should keep lows there in the 20s on Sunday and Monday. However, temperatures along the coast, which were below freezing in some areas at the start of the week, should rise into the 60s and 70s this weekend.

The California Independent System Operator reported peak demand this week of 33,922 MW, but demand fell by about 1,000 MW on Thursday and is expected to drop again today. Limitations and shutdowns of power plants were also mild, as Cal-ISO reported only 4,888 MW of curtailed generation on Thursday, down from about 6,320 MW on Monday.

Power did not trade on Monday, the Martin Luther King Jr. holiday, and Tuesday deliveries had been traded the previous week.

North of Path 15 and South of Path 15 peak power generally traded a bit above 70 mills/kWh on Tuesday, falling to about 58 mills/kWh Thursday before gaining two or three mills for deliveries this Monday. Off-peak power was priced at about 57 mills/kWh in Tuesday trading and finished the week at about 54 mills/kWh.

The Northwest reported that it may have set an all-time record for peak demand of 59,400 MW last Friday. However, temperatures also rose in Oregon and Washington later in the week, pushing down demand and electricity prices. Mid-Columbia peak power traded for between 60 mills and 70 mills/kWh Tuesday, but dropped to about 51 mills/kWh in Friday trading. Nighttime power, at a high of 58.50 mills/kWh on Tuesday, finished at about 49 mills/kWh for deliveries this Monday.

High-demand power at the California-Oregon border traded around 66 mills/kWh to start the week, and dropped to between 54 mills and 57 mills/kWh in Friday trading. Off-peak power wobbled just a bit throughout the week, and settled near 51 mills/kWh.

Temperatures at Palo Verde, expected to range between freezing and the high 60s through this weekend, left traders putting power values there at a wide spread. High-demand power on Friday went from 40 mills/kWh all the way to 54 mills/kWh, after starting the week between 60 mills and 68 mills/kWh. Nighttime power was at about 49 mills/kWh in Friday trading, after dropping to a low of 41.50 mills/kWh the previous day.

Finally, more weird news: Rats chewing on electrical wires reportedly caused a blaze that spanned more than 300 acres near the Diablo Canyon nuclear power plant this week. The plant has not been affected, and the blaze should be extinguished by tomorrow [Chris Raphael].

Gas Prices Retreat on Warm Forecast

Temperatures are supposed to be below normal for the Midwest and the Northeast this weekend, but in the West, hotter weather midweek sent natural gas prices on a hasty decline.

On Thursday the U.S. Energy Information Administration reported a storage withdrawal of 52 Bcf in the East and 17 Bcf in the West for the week ending Jan. 12. But the dip did not make a difference in Western prices. Stocks are still 354 Bcf above last year's total and 20 percent above the five-year average. However, the coming cold snap has analysts predicting a larger withdrawal next week.

Natural gas delivered on Tuesday of this week was traded last Friday because of the Monday holiday. Prices tended to follow temperatures. As the cold snap began to lift midweek from the West and higher temperatures crept in, gas values fell.

Permian Basin gas traded this week at a high of $7.05/MMBtu on Tuesday, but dropped to between $6.10 and $6.40/MMBtu for weekend deliveries. San Juan Basin gas settled at about $6.05/MMBtu after starting the trading week also at a high of $7.05/MMBtu.

Southern California border gas traded for between $6.80 and $7.02/MMBtu Tuesday, lost more than 50 cents by Thursday, and went from $6.19 to $6.40/MMBtu in Friday trading [C. R.].

Western Electricity Prices
Week's End: January 15 - 19, 2007
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 31.99-321.37 7.08-104.41
Mid-Columbia 49-70 45-58.50
COB 53-67.25 46.50-54.50
NP 15 54-72.50 45.50-58
SP 15 56.50-75.50 45.25-58
Palo Verde 40.25-68.25 41.50-54

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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