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Western Price Survey / Archives

February 7, 2003
Dry Cold Makes Power Gold

Last week's rains in the Pacific Northwest have given way to drier skies and lower temperatures, inducing spot prices higher at Western hubs. Rising fuel prices for electric generators encouraged the push, along with lowered output at several in-state power plants.

"We were waiting for the cold to come in and now it's finally here," said one trader.

Another market player said that last week's inflows on the lower Columbia River have since subsided, leaving some with renewed fears over a below-normal water year. Rain-free weather in the Northwest is expected to last into next week.

Power offers from the Bonneville Power Administration flipped around like a salmon: Peak supplies were available in quantities of 200 MW, 400 MW and 200 MW again as the week progressed. BPA's light-load offer started at 200 MW, fell to 50 MW midweek and ended at 100 MW for Sunday-Monday deliveries.

On the California Independent System Operator grid, the colder weather did not rouse load levels. Peak demand slipped from about 29,600 MW to approximately 29,200 MW midweek, then withered to 27,649 MW on Thursday evening. Projections for Friday were pegged at 28,297 MW.

What did increase, according to Cal-ISO reports, was the number of conked-out power plants. Capacity lost to generation curtailments ranged from about 15,500 MW to more than 18,000 MW.

Diablo Canyon No. 2, which has been in coastdown mode to conserve fuel, ramped down completely early this week to enter a 30-day refueling shutdown. At the San Onofre Nuclear Generating Station, unit 2 suffered a reactor trip Saturday morning at 3 am but ramped to full power by Monday. According to Nuclear Regulatory Commission reports, SONGS No. 2 was operating at 85 percent of capacity early Monday.

Arizona Public Service's Four Corners No. 4 unit, down earlier in the week for scheduled maintenance, returned to about half its 750 MW capacity on Wednesday. Duke's 337 MW Morro Bay No. 3 unit is still off line. Pacific Gas & Electric's 260 MW La Paloma No. 4 plant, out of service for most of the week, returned to the market for Friday.

Prices at several Western hubs broke through 50 mills/KWh, with Mid-Columbia the exception. Peak power at Mid-C fetched as much as 48.95 mills and supplies at the California-Oregon border drew up to 50 mills/KWh. Heavy-load prices at SP15 outpaced other hubs at a high of 55.5 mills/KWh. Premiums at NP15 ranged from 46 mills to 53.75 mills/KWh, and peak prices at Palo Verde climbed to 54 mills/KWh.

By Friday, off-peak prices streaked to almost 50 mills/KWh, rising between 5 mills and 9 mills/KWh from Thursday trades. Mid-Columbia prices soared to 47.5 mills, and COB premiums rumbled to 49.5 mills/KWh.

At the Alberta power pool, real-time prices held steady, despite a spike to 315.64 mills for one peak hour and a sky-high 223.59 mills/KWh for one off-peak hour. Loads were fairly moderate, ranging from about 6,400 MW to approximately 8,100 MW [Jason Mihos].

Gas Gunning for Six-Dollar Range

February has rolled in with a chill and an appetite for stored gas, and traders rode those conditions all the way to the bank this week. Prices for bilateral deals were well above $5/MMBtu at several Western hubs, and gas at the Permian Basin traded for as much as $6.02/MMBtu on Friday. NYMEX futures also traded higher throughout the week, keeping spot prices on the rise.

Strangely, gas prices backed off somewhat on Thursday, when the Energy Information Administration reported that supplies in storage had decreased by 208 Bcf compared to the previous week. Nationwide, gas stocks totaled 1,521 Bcf, a steep drop from the 2,332 Bcf on hand for the same period in 2002.

By Friday, prices resumed their climb.

At the San Juan Basin, prices did not keep up with neighboring Permian but were active in their own right, trading between $4.57 and $5.25/MMBtu. Gas at the Southern California border was priced over $5 for most of the week, dipping to $4.90 and running up to $5.45/MMBtu.

Prices had another strong week at Pacific Gas & Electric's CityGate, moving from $5.10 to $5.44/MMBtu. Malin gas peaked at $5.27/MMBtu.

Supplies at the AECO hub in Canada eclipsed $5 briefly midweek but mostly traveled between $4.70 and $4.90/MMBtu [J. M.].

Western Electricity Prices
Week of February 3-7, 2003
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 25.17-315.64 10.19-223.59
Mid-Columbia 40.5-48.95 29-47.5
COB 44.25-50 31-49.5
NP 15 46-53.75 31.5-47.5
SP 15 49.3-55.5 30-46.75
Palo Verde 46.5-54 27-45

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


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