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Western Price Survey

Week's End Edition
February 4, 2011
Cold Weather Toys With Western Gas, Electricity Values

Natural gas and electricity prices spiked in some parts of the West as freezing temperatures led to a drawdown of natural gas supplies in New Mexico, Arizona and Nevada. The week saw wellhead freeze-offs, shipment of gas east to meet rising demand, and greater heating demand in the Southwest.

Price spikes were most pronounced at Western hubs affected by cold temperatures in the Midwest and Southwest. Permian Basin gas posted a high price during the trading period of almost $8.05/MMBtu as Texas grappled with snow. The U.S. Energy Information Administration noted that until this cold snap, Western "prices had shown little upward pressure this winter." Southern California Border gas, meanwhile, went as high as $7.50/MMBtu.

San Diego Gas & Electric asked its customers Thursday to actively conserve energy in the wake of supply challenges. The utility plans to temporarily curtail natural gas delivery to about 88 of its commercial customers, a number that includes power plants and other industrial customers that have agreed to service interruptions when gas supplies are low.

Gas values across the West retreated by Friday, Feb. 4, however, in anticipation of lower weekend demand and warmer weather.

According to the EIA, 2.353 Tcf of gas existed in storage as of Friday Jan. 28. The amount is 69 Bcf below last year's levels and 5 Bcf above the five-year average.

Western power prices corrected after a midweek jump. Over the Friday-to-Friday trading period spanning Jan. 28 to Feb. 4, prices were mixed. Northwestern hubs experienced losses of less than $2 (see chart), but California hubs remained strong. South of Path 15 peak power earned $4.45, closing at an average of $42.27/MWh. North of Path 15 finished at around $40.16/MWh, a gain of about $2.35 versus the previous Friday.

Palo Verde peak electricity prices jumped about $9.75 over the trading period, finishing at an average of $42.29/MWh. The hub also posted the highest spot price among Western hubs at $62.50/MWh as the Southwest grappled with cold weather.

Meanwhile, off-peak power prices climbed between $5 and $9 over the trading period (see chart for values).

What's ahead: Seattle expects partly sunny, dry weather Monday, Feb. 7 through Thursday, with temperatures in the high 40s. An influx of cold air is expected Monday night through Tuesday for Eastern Washington and Oregon; another cold front is expected sometime Thursday. Sunny, dry weather with highs in the 60s is anticipated in San Francisco Monday through Thursday. Minimal cooling may occur in the region starting midweek. Sunny, dry weather is also forecast for the Los Angeles area. Highs of 71° F are expected Monday and Thursday.

Correction: Information in last week's price report should have read as follows: Flows measured at the Bonneville Dam over the last two weeks in January averaged 245,000 cubic feet/second. During January 2010, the average flow at the dam was 125,000 cf/s, and the 10-year average for the last two weeks of January is 155,000 cf/s [Linda Dailey Paulson].

Western Electricity Prices
Week's End: Jan. 31 - Feb. 4, 2011
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 20.57-994.48 9.49-42.33
Mid-Columbia 19-37.75 17-34
COB 27-44.50 21.25-34
NP 15* 40-50 n/a-n/a
SP 15* 40-51.50 25.50-36.25
Palo Verde 36-62.50 21-43.50

* Prices represent both day-ahead locational marginal prices (financial swaps, or EZ Gen DA LMPs) and quasi-swap prices (EZ Gen) as reported by ICE.

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.

Please contact webmaster@newsdata.com with questions or comments about this site.

Contact Chris Raphael, editor with questions regarding Price Survey Content.

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