Western Price Survey / Archives
January 21, 2005
Post-holiday trading in the electricity spot market started back up this past Tuesday after the long weekend brought about by the Martin Luther King Jr. holiday. Fundamentals in the Western energy markets did not manage to drive the price of power significantly up or down this week. The spate of storms that pummeled California have abated, and warmer temperatures have returned to the Northwest following a spell of cold weather in that region--all contributing little verve to the value of power.
The same cannot be said for the East Coast. With cold-weather warnings being issued in New England, the power-pool spot price in that region soared as high as 180 mills/KWh for Friday deliveries. Weekend packages changed hands for a bit less on Friday, dropping to 115 mills/KWh.
Whether the price of natural gas in the East was tracking the power prices or the other way around was hard to determine. Either way, the price of natural gas in the day-ahead market kept pace with the rising price of power. At the Algonquin CityGate hub, gas costs hit $35/MMBtu in late-week trading, while gas shipped into New York averaged $28/MMBtu, with a high of $45/MMBtu recorded on Thursday.
Western transmission capacity curtailments also did little to strengthen prices, despite limitations on transfer of power from the Northwest. The Pacific DC Intertie went out of service last week on account of scheduled work being done at the Celilo-Sylmar 1,000 KV DC line poles No. 3 and No. 4. The PDCI was back in service Friday.
The California-Oregon Intertie is curtailed as well. In the north-to-south direction, the COI is limited to 4,100 MW, and in the south-to-north direction, 2,450 MW. Flows from the Northwest are limited because equipment is out of service at the Gates Substation. Flows northward are curtailed due to the loss of the Schult-Raver No. 1 and the Shultz-Echo No. 1 lines, each with a rating of 500 KV.
Between the Tuesday and Wednesday trading sessions, peak prices in the Northwest drooped, then stagnated for the rest of the week. Prices in California did manage to gain a little ground at the end of the week, enlivened by expectations of colder weather.
Mid-Columbia peak-power prices ranged from 43 mills to 49 mills/KWh on Tuesday, but by the following day they had dropped to between 40 mills and 44.50 mills/KWh, staying in that range through Friday. Off-peak power costs at the hub opened the week between 35 mills and 38.50 mills/KWh. Next-week packages traded for as much as 40.75 mills/KWh.
California-Oregon border hub prices slipped anywhere from 2 mills to 6 mills during the first half of the week and rebounded a bit by Friday. Peaking at 53.50 mills/KWh on Tuesday, by Wednesday daytime power was changing hands for between 46.50 mills and 47.25 mills/KWh. Indices reported prices in the range of 46.50 mills to 49.75 mills on Friday.
There was little difference in the cost of power on the daily market between the northern and southern delivery points in California during the week. North of Path 15, peak-time power moved for between 57 mills and 59.50 mills/KWh for packages delivered Wednesday. Power deliveries scheduled for that same day south of Path 15 attracted between 56.55 mills and 59.50 mills/KWh. The cost of power in both halves of the state wilted slightly at midweek, but by Friday recovered to between 57.25 mills and 58.75 mills/KWh. Off-peak prices swelled to 44 mills/KWh on Friday after spending much of the week close to 37 mills/KWh [Shauna O'Donnell].
Western Gas Costs Muted While Eastern Prices Crescendo
The Energy Information Administration held off releasing its natural gas underground storage report until Friday of this week on account of the inaugeral event in Washington, DC. Usually released on Thursday morning, the report this week showed a 110 Bcf withdrawal of natural gas from underground storage for the week ending January 14. The eastern portion of the country took out half of that total, 56 Bcf, no doubt in response to the cold weather blanketing the region.
Here in the West, the withdrawal recorded by the EIA totaled 26 Bcf.
A huge contrast was also seen in the spot market this week. While gas prices at Western delivery hubs and producing basins stayed well within the cost range of the past few weeks, gas delivered to New England and New York traded well within double figures (see electricity report) [S. O'D.].
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