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Western Price Survey / Archives

February 2, 2001
Bilaterals Move Lower; CDWR Issues Another RFB but Worries about Water

After beginning the week with the usual Monday "uncertainty premium" energy price moved lower across the West, with Northern prices falling precipitously. Mid-Columbia and California/Oregon Border prices had been as high as 500 mills/KWh Monday but dropped to 210 mills to 250 mills/KWh by Friday. Off-peak prices were relatively flat, if not higher.

Palo Verde prices had a less steep slide, moving to the 160 mills to 210 mills/KWh range from around 250 mills/KWh earlier. Off-peak pegged at 130 mills/KWh.

The California Power Exchange transacted its last auctions midweek, ending its nearly three years of operations on a deflated note of low volume and unpredictable prices.

The 18-day streak of Stage Three emergency in California contributed to an overriding sense that trouble was just a few hundred megawatts away. The California Independent System Operator did not trigger utility service cuts, although it continued to rely on the federal emergency order to make sure it has enough capacity to meet load. The decision by the California Public Utilities Commission last Friday to suspend the voluntary curtailment program for utility customers did not seem to have an immediate impact. Cal-ISO reported that out of the 100 hours of curtailments effected during January, response ranged widely from 300 MW to over 2,000 MW of load reductions.

On Thursday, Governor Davis signed emergency legislation fully authorizing the California Department of Water Resources to purchase power under long-term contracts and granting another $500 million for the general fund for power procurement while a bond issue is put together. In testimony at the Legislature Tuesday, DWR officials revealed that they had dipped into agency funds to finance power purchases, and were spending about $45 million each day. No volumes for transactions were revealed.

Negotiations evidently continue with power suppliers and the Governor said he expects some contracts to be signed by February 5. He also announced that DWR would issue another solicitation for power "as soon as possible."

The department posted a notice on its Web site at: www.water.ca. gov early Friday morning. Any bids for short-term sales or long-term contracts will be due February 6. For more information, call (916) 653-6192.

Cal-ISO has started detailing generation units unavailable for service, both for scheduled maintenance and unplanned outages. About three dozen units were in the unplanned category this week, including three units each at Pittsburg and Potrero and a Hunters Point unit in the San Francisco area. Four units at Highgrove and individual units at Redondo Beach, Los Alamitos and Long Beach, were among major outages reported in the south. Cal-ISO said about 8,600 MW all told was unavailable this week.

Water availability continues to be a concern throughout the West. CDWR this week reduced its estimates of water allocations to just 20 percent of requests. Following a record delivery of 3.5 million acre feet in 2000, CDWR is projecting just 850,000 Maf this year. According to water analyst Curt Spencer, "That would be the lowest delivery since 1991 when we had a draught."

The latest snow survey figures show that snowpack in Northern California is just 56 percent of normal for this time of year, with an average snow/water equivalent of 11 inches. That could translate to less water flowing out of Oroville and Shasta reservoirs, and less hydroelectric generation both at Oroville and the Edmunson pumping station.

The Pacific Northwest situation is no better. Precipitation is only 61 percent of average and the run-off forecast sits at about 65 percent of normal. The federal reservoir system is 47 percent full, as Bonneville Power Administration has been running more water than it wants to in order to prevent costly power purchases [Arthur O'Donnell].

Gas Prices Dive and Soar

Natural gas prices delivered to California initially took a deep plunge this week but then reverse course Thursday, with both the Southern California Border and the PG&E CityGate spiking to $16/MMBtu.

Basin price changes were in a more confined range.

Traders pointed to a low-inventory operational flow order on the PG&E system that put pressure on supplies coming from the southern part of the state. From a low of $10.43 on Tuesday, Topock jumped to $16.00 but eased to the $13.50 to $15.50/MMBtu range Thursday. Changes in gas nominations with the start of a new month were also to blame, traders said.

San Juan and Permian Basin prices dropped from $6.665/MMBtu early in the week to about $5.80, but them picked up again. They ended just above $6.05/MMBtu.

Malin stuck around$10.50/MMBtu and the SF CityGate gave back a few dollars to come in around $13/MMBtu. Up in Alberta, gas varied between $(C)7.25 and $8.53/Gigajoule, closing out Thursday at $7.61/Gj [A. O'D.].

Western Electricity Prices
Week of January 29-February 2, 2001
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 98-245 76-123
California PX (WAC) 127-232 241-420
Mid-Columbia 205-500 200-325
NP 15 165-220 150-220
COB 210-500 200-325
Palo Verde 160-250 130-175

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


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