Western Price Survey / Archives
February 1, 2002
A sharp drop in the temperature and associated snow early in the week did not cause a big increase in peak period prices at Western hubs. The increase in heating load did have an apparent effect, however, on boosting mid-day power use and narrowing the gap between daytime and night-time prices, especially in the Pacific Northwest. Gas prices also got a lift on Thursday but traders suggested that had more to do with the change of month than the cold.
Wintertime energy use exhibits a double shoulder with a load trough in the middle of the day. Schedulers said that overall loads seemed quite a bit higher this week, but that really did not translate into a big jump in peak loads.
The California Independent System Operator marked its high point for the week on Tuesday (on the heels of an unusual cold front that dropped snow at relatively low elevations) of 33,200 MW. Wednesday had backed down to 32,700 MW, though, and Thursday was even lower.
There is still a fairly swift ramping up necessary between 5 pm and 6 pm, as Cal-ISO calls about 4,000 MW of additional generation into operation to meet the evening peak. The outage list continues to bounce around in the 11,300 MW to 13,100 MW range, with outages weighted to planned maintenance and economic shut-downs in the face of low prices and ample supplies.
Utilities appear to be rotating their units; for instance, Pacific Gas & Electric pulled Unit No. 2 of the Helms pumped storage facility out of service just as it was ramping Unit No. 1 back from repairs on Tuesday. There was a brief overlap but the switch of 407 MW units was a smooth one. Edison's Big Creek hydro had been curtailed by 720 MW but was heading back to full operations midweek.
The Bonneville Power Administration appears to have plenty of hydro to sell. The formal daily offering shows 200 MW of daytime energy for sale, but buyers said they were able to purchase supplies from BPA easily, indicating that more was available.
If there was peaking pressure at all, it was at Palo Verde, which approached 27 mills from a starting point of 22 mills on Monday. Other Southwestern hubs, including Mead in Nevada, also moved higher on an extended cold front that sat over Las Vegas and covered the surrounding desert with frost.
Northern California also reported a chill, with prices at the California/Oregon Border and NP15 heading up. COB's peak price was diluted by the still-low Northwest numbers and crept up to 23.5 mills from the 22 mills/KWh mark, but NP15 rose to 27 mills/KWh on Thursday. SP 15 was reportedly up to 27.5 mills but mostly ranged from 24 mills to 26 mills/KWh at peak and 22.5 mills to 23 mills/KWh off-peak.
Mid-Columbia remained in the 19 mills to 20.5 mills range for daytime power, and the off-peak price crept up to 17.5 mills/KWh [Arthur O'Donnell].
Gas Pops on Cold Weather and Calendar Change
Western natural gas prices rose through the week, reflecting a bit more draw from power generation and heating load as a cold front blanketed the region. Surprisingly, though, traders noted that the Southern California Border price did not rise as much as supply basin prices. That was a signal that the border price was competing with storage withdrawals, rather than pipeline supplies.
The San Juan and Permian stayed neck and neck all week as they rose from $1.94 to $2.07/MMBtu. Sometimes the New Mexico price was a penny higher, sometimes it was the Texas tariff, but really the difference was negligible. Topock did not move above $2.15/MMBtu on any lasting basis, however.
Northern California prices were a bit higher. Sellers wanted $2.27 for gas from the ground, but the SF CityGate price undercut that by a few pennies.
Supplies appear to be balanced currently. The cold weather brought some added demand and storage withdrawals. Traders are hoping for continued moderation in the weather. A lingering cold front will sap storage that may be needed later, but a warm spell could depress demand and really throw prices lower [A. O'D.].
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