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Western Price Survey

Week's End Edition
Febuary 6, 2009
As Rain Falls, Power Prices Climb, Ignoring Natural Gas Weakness

Electricity prices in the West advanced this week as rain storms pummeled the region and brought much-need rain to California. The uptick came despite dipping natural gas prices, which lost less than 20 cents/MMBtu on average.

Aside from Palo Verde, power prices posted in-creases at all major Western trading centers ranging from $1 to over $5/MWh.

Colder-than-normal temperatures in states east of the Rocky Mountains pushed up withdrawal of natural gas in storage last week by 195 Bcf -- the biggest drop in one year -- to 2.179 Tcf, the U.S. Energy Informa-tion Administration reported. Yet stockpiles are 2.8 percent higher than a year ago, and 0.8 percent higher than the five-year average.

At 334 Bcf, the West saw supplies dip by 20 Bcf, though inventory levels were 27 percent above last year and 19.3 percent greater than the five-year aver-age.

California power demand was modest this week -- 30,000 MW on Monday, 29,900 MW on Tuesday, then up to 30,200 MW on Thursday. Usage was ex-pected to fall to 28,800 MW this weekend.

From Monday to Friday, at the California-Oregon border, average peak prices rose almost $1 to $43.13/MWh. Off-peak trades were up over $3 to av-erage $39.40/MWh.

Average daytime Mid-Columbia prices rose $4 to $43.32/MWh. Nighttime values settled at an average of $41.02/MWh, up over $5.

California average prime trades picked up little ground this week, adding 90 cents to $46/MWh at North of Path 15, and $1.44 at South of Path 15 to $46.23/MWh. Daytime values increased in the north by more than $3 to an average of $36.42/MWh, and rose $1 in the south, to $32.66/MWh.

Palo Verde average peak prices dipped $1 to $35.70/MWh, while off-peak trades inched up 9 cents to $26.72/MWh.

Californians should dig out their umbrellas this week because more storms laden with rain are headed for the Golden State through Monday night. There's a chance of mudslides and flash flooding in Southern California, along with one to two feet of snow in the mountains there, AccuWeather said.

San Franciscans and Angelenos should see tem-peratures in the mid 50s to low 60s, respectively. Rain will reach Phoenix tonight and remain in the region through Monday, and push temperatures from the low 70s into the high 50s.

It's partly cloudy, with a chance of showers in Portland and Seattle this weekend. Temperatures will be in the high 40s to low 50s in Portland, while Seattle will experience high 40-degree Fahrenheit weather.

Low natural gas prices last year pushed imports of liquefied natural gas to a five-year low of 352 Bcf, the EIA said. Compared to 2007, shipments were down 46 percent. Many exporters bypassed the U.S. last year and sent their LNG to Asia and Europe where it com-manded higher prices.

The recession is having an effect on industrial us-ers, with natural gas demand down 4.3 percent in No-vember to an average of 18 Bcf per day, according to the EIA. Analysts at SunTrust Robinson Humphrey in Houston estimate a decline of 6 percent this year, or about 1 Bcf per day. About a third of natural gas used in this country is consumed by factories.

Meanwhile, Devon Energy, the country's biggest independent oil and gas driller, will shave its own ex-penses on exploration in reaction to falling energy prices. The company spent $8.5 billion in 2008 but expects to spend only $3.5 billion to $4.1 billion this year.

The Columbia Generating Station's 1,250 MW nu-clear unit fell to 85 percent power Friday for sched-uled maintenance. Diablo Canyon's 1,138 MW first unit remains offline for refueling and the replacement of its steam generators. Its restart date will likely be in a few months. Meanwhile, the San Onofre Nuclear Generating Station's 1,070 MW second unit is closed for maintenance and no date has been given for its re-start [Kristina Shevory].

Western Electricity Prices
Week's End: February 2 - 6, 2009
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 22.80-60.93 15.26-80.15
Mid-Columbia 38.25-46.50 34.75-45
COB 41.25-45 34.50-43.50
NP 15 40-47.50 31.25-37
SP 15 42-48.50 27.75-33.50
Palo Verde 33.50-37.75 23.75-29.25

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


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

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