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Western Price Survey / Archives

January 26, 2001
Stage Three Won't Go Away

After ten straight days in the highest level of emergency, the California Independent System Operator terminated Stage Three status on Thursday at a minute before midnight. But then, at 4:32 am Friday, it found itself severely short of capacity and returned to Stage Three at least through tonight.

The action was pinned on loss of an otherwise unidentified 260 MW generator in Northern California.

Previously, grid operators expressed confidence they could move the alert down several notches, citing improved generation reserves and an overall sense that the worst had passed.

"It's 100 percent better," said a relieved operations director Jim Detmers on Thursday. Though the system escaped rotating outages since last week's crisis, there was a continuing need to maintain emergency status to ensure that reluctant power suppliers sold into California and utilities and media maintained a conservation campaign. Cal-ISO applauded the daily contribution of about 1,000 MW saved by consumers during the tough week.

The worst point came Sunday afternoon, when equipment problems on the north end of the DC Intertie tripped the line and shed 1,700 MW that had been flowing south-to-north. Cal-ISO was using the line to get around the Path 15 restrictions and to return exchange energy to the Pacific Northwest. The outage caused about 100 MW of load-shedding at several municipal utilities and irrigation districts in Northern California, but for less than a half hour.

Frequencies on the high-voltage line popped to over 60.12 Hertz, an unusually high level, and Path 15 became overloaded-some 800 MW above its rated capacity. As operators in California and Oregon tried to make up for the lost flows, both turned up the hydroelectricity, with Cal-ISO requesting water releases on the Kings River and Bonneville Power taking more water from its reservoirs.

Despite the confusion, the incident lasted only about 20 minutes. However, it left little water at the Helms pumped storage unit for use Monday, and the DC Intertie stayed at about half of its 1,800 MW rating until Thursday morning when it was restored to full.

With each day, more generation returned to service and gave operators added breathing room, though some 7,000 MW of units remained offline for repairs, refueling or scheduled maintenance. Beginning Thursday, Cal-ISO started posting a list of units that were reported offline, although it hedged by saying it might not know everything. Two dozen units at 18 locations were reported in unplanned outages, while 20 units at 17 stations were in scheduled maintenance. They ranged in size from small combustion turbines to the 1,050 MW San Onofre No. 2, which is now exiting from its refueling outage begun January 2. If all goes well, SONGS may be back in full by Monday.

Under a new state law, the list will be updated daily-as a way to pressure generators suspected of withholding power to manipulate prices. The accusations have never been substantiated, but now at least the market gains another piece of valuable information that will no doubt figure in traders' daily calculations.

Prices at bilateral hubs moved downward in the first part of the week, then picked up slightly. Transaction prices "are still ridiculous, but not as ridiculous as they were," said one scheduler. With all the outage hubbub, Monday's prices were in the 350 mills to 500 mills/KWh range across the West.

By Thursday, Mid-Columbia and California/Oregon Border trades were edging below 300 mills/KWh, with off-peak energy in the 240 mills to 260 mills/KWh range.

NP15 was about 265 mills and SP15 lower at 210 mills to 215 mills/KWh, reflecting the continued disparity in generation availability in those zones.

Palo Verde and other Southwest points closed out at 220 mills/KWh, but a few trades were reported up to 245 mills/KWh.

The California Power Exchange seems to be bottoming out at 26 GWh of volume each day, with the day-of market near dead. Prices showed weird fluctuations due to the low load, and as a minor footnote to the PX obituary, an off-peak price spiked to the technical limit of 2,499 mills/KWh at midnight Monday [Arthur O'Donnell].

After Drifting Lower, Gas Revives a Bit

Uncertainty marked natural gas markets and national benchmarks showed mixed results on future weather forecasts and unexpectedly high storage withdrawals. Western hubs reflected the trend by drifting lower for the first part of the week, then turning upward Thursday.

"The momentum seems to be shifting," said one buyer. Part of the reason was that traders turned their attention to February deals, which featured lower prices than daily trades and balance of month arrangements. Also adding to the mix was strong demand for storage withdrawals in Southern California as the spread between basin and border prices expanded. SoCal Gas effected a balancing requirement to try to keep pipeline flows steady after storage levels dropped below a pre-set trigger.

Topock prices varied in a range from $15.40 to $16.50/MMBtu, but next month's quotes were lower at $13.50/MMBtu.

Permian and San Juan Basin prices stuck close in a range from $6.70 to $7.50/MMBtu, though $6.80 appeared to be the most quoted price for the week.

Malin trades at $10 to $10.50/MMBtu trailed the prices at the PG&E CityGate by a dollar or so.

Big volumes flowed out of Alberta, but mostly to the Midwest. AECO hub prices dropped through the week from $(C)9.70 to $9.05/Gigajoule, but settled out at $9.46/Gj Friday [A. O'D.].

Western Electricity Prices
Mid-week January 22-26, 2001
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 126-444 123-144
California PX (WAC) 175-284 269-526
Mid-Columbia 290-500 240-260
COB 295-390 230-260
Palo Verde 220-380 120-150

Archives of the Western Price Survey for the past year are also available online.


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Contact Shauna O'Donnell, editor with questions regarding Price Survey Content.

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