Western Price Survey / Archives
February 8, 2002
After clinging to a narrow range of prices for most of the week, Western power slipped a few notches during trading for the Friday/Saturday packages. Traders pointed to diminishing loads and continued wet weather in the northern territories as reasons for the drop in prices.
Off-peak energy in the Northwest and at California/Oregon Border held on, though, further diminishing the spread between daytime and nighttime prices at those points. "Flat, flat, flat," was one scheduler's assessment of prices, loads and time differentials.
The load curve has not entirely straight lined, however. While the morning hump experienced from 7 am to 10 am is climbing higher, it does not quite match the 30,000 MW or more peak set during the 6 pm and 7 pm hours at the California Independent System Operator. The mid-day trough represents a dip in demand of 4,000 MW or so. As grid operators approach the evening peak, they have to quickly dispatch about 3,500 MW within an hour to match load.
There are plenty of generation units available, it seems, despite the daily outage list showing as much as 12,700 MW of maintenance and economic shut downs this week. Given current market conditions, planned outages are clumped at several multi-unit facilities, such as Encina, Long Beach, Moss Landing and other familiar names. Unplanned outages were recorded this week at Pittsburg (600 MW in all), Coolwater No. 4 (245 MW), Contra Costa No. 7 (337 MW) and South Bay No. 4 (222 MW).
If there was a high point of pricing for the week, it occurred Wednesday at Path 15 zones inside California, where NP15 and SP15 stretched to 26 mills/KWh before falling to 23 mills/KWh heading into the weekend. Off- peak was already weakening in the 20 mills to 23 mills/KWh range, but went even lower to the 18 mills to 19 mills vicinity.
Palo Verde managed a stab at 24 mills/KWh early in the week but eroded to 21 mills/KWh for peak and 14 mills to 15 mills/KWh for off-peak power. An extended maintenance outage taking out one of the 500 KV Palo Verde/Gila lines may be contributing to the lower price pressures, but transaction volume was low anyway, traders said.
Mid-Columbia was down to 18.5 mills/KWh for daytime energy and 18 mills/KWh for overnights by the end of the week. Mid-C had started out at 21 mills/KWh but dropped on continued rainfall. Similarly, COB gave up its 22 mills to 24 mills position and came to rest at 21 mills/KWh at peak and 19.5 mills/KWh off-peak [Arthur O'Donnell].
Withdrawals Blunted by Low Demand
National gas withdrawal figures came in at the low end of forecasts, barely 82 Bcf came out of the wells this week, according to the American Gas Association. That still leaves 2.2 Tcf in the ground, or 67 percent of storage capacity.
Examination of the Western storage figures-a net withdrawal of 34 Bcf, indicates two-way flows. At the Wild Goose facility, for instance, 62 MMcf was pulled but 42 MMcf was put back in.
That was just illustrative of the lower demand for gas this week, as was a 3 percent low-inventory OFO called by the PG&E pipeline system on Tuesday. The low flows translated into little price movement at most locations. "Every day it's the same at the border and the same at the city gates," one trader said. Volumes stagnated as well.
The highest pricing levels were recorded for Tuesday deliveries, but even at their peak, most hubs varied within pretty tight ranges. Basin prices at San Juan and Permian stuck together in the $2.02 to $2.05/MMcfd range by the end of the week. SoCal Border at Tpock narrowed to the $2.13 to $2.18/MMcfd bracket.
The SF CityGate was a few cents higher at $2.21 to $2.24, while Malin slipped around in the $2.02 to $2.08/MMcfd range.
The only real change was seen at the Alberta hub, where a lackluster price of $(C)2.77/Gigajoule gave way to $3/Gj gas by Thursday. It probably was not due to Western demand, traders said, indicating that the Canadian supplies were travelling East to meet some real winter demand [A. O'D.].
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