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Western Price Survey / Archives

February 9, 2001
Traders Feel Around in Dark for Price Indicators

As more and more of California's power transactions flow into the black hole of state agency procurement, solid price indicators are becoming harder to find. The $150/MWh cap on imbalance energy at the California Independent System Operator masks the burgeoning price that CDWR is paying for spot purchases, given that nearby bilateral markets reached about 425 mills/KWh midweek on fears of energy shortages as cold weather stretched over the West.

"Things started out pretty high then petered out," said a trader on Wednesday. Many got to work fearing that the expiration of federal orders might mean a severe power shortage. Municipal utilities even issued a news release claiming that rotating outages were a near certainty-though that was news to Cal-ISO.

Price ranges for the week were fairly broad: Mid-Columbia and California/Oregon Border prices ran from 190 mills to 425 mills midweek, then down to 250 mills to 300 mills/KWh heading into the weekend. NP 15 jumped as high as 300 mills but was trading in the 210 mills to 245 mills/KWh range late in the week. SP 15 varied from 150 mills to 210 mills/KWh, pretty close to the Palo Verde price.

Cal-ISO's out-of-market expenditures were highly unpredictable, rising to $16 million for imports on Tuesday, then dropping to just $932.00 on Wednesday, as most of the purchases were shuffled over to DWR. Cal- ISO still needed to find about 2,000 MW to meet Thursday's peak of just over 30,000 MW.

Contributing to the uncertainties was the unusual event at San Onofre Nuclear Generating Station last Saturday, February 3, when the catastrophic failure of an electrical bus caused a fire that brought the unit to a halt as it was in the process of restart after a month of refueling.

Loss of lubricant pumps cut off oil to the moving parts and may have exacerbated equipment damage. Operator Southern California Edison has not revealed the full extent of damage but said the unit will be offline for several weeks.

Cal-ISO still reports about 9,000 MW of units unavailable for service.

Its daily log of outages shows a constant stream of on-again, off- again operations. The San Francisco Bay Area was hit hard with unscheduled outages at three Pittsburg units, two Hunters Point units and two at Potrero station, as well as the loss of Crockett Cogeneration all week.

In Southern California, Redondo, Alamitos, El Segundo and Coolwater each had a unit in unplanned outages Thursday. The central coast was missing a Morro Bay unit and one at Moss Landing. In addition, about three dozen units of various sizes and locations were reported in scheduled maintenance hiatus this week.

Oh, and by the way: California was in its 25th straight day of Stage Three Emergency on Friday, with no sign of a let-up [Arthur O'Donnell].

Gas Prices Do the Tilt-a-Whirl

With each day bringing another challenge in the unprecedented California energy emergency, market prices seemed like some mad amusement park ride, lurching forward and snapping back-giving everyone a bad case of vertigo. "This doesn't feel real," said one fuel trader. "There's too much energy commodity being traded with no prices being revealed. There's not enough physical firm gas flowing in the pipelines and too much coming out of storage. I don't know how much longer this can last."

That sentiment seemed prevalent in trading floors and prices this week seemed poised for a big jump next week, especially if cold weather continues. Northern California was about 10 degrees colder than average midweek, and Southern Californians found frost on their doorsteps.

Gas prices dropped at the start of the week but turned around with a vengeance. Prices at the Southern California Border rose to $15/MMBtu, dropped to $12.50, then moved up again to the $13 to $14/MMBtu range. Basin prices moved in tandem in the $5.38 to $5.80/MMBtu range until Thursday, when San Juan zoomed to $7.81/MMBtu while Permian stuck at $6.45/MMBtu. "It looks like people are expecting prices to pop in the next week or so," said a utility trader. "SoCal storage is at a critical level and that could cause prices to jump exponentially." PG&E is also facing gas supply problems, and projects significant withdrawals from storage over the weekend.

In Northern California, Malin bounced around in the $9.00 to 10.00/MMBtu range, and CityGate varied between $10.00 and $12.50/MMBtu.

Alberta gas moved higher on colder weather in the north, from $7.45/Giagajoule Monday to $8.66/Gj closing out the week [A. O'D.].

Western Electricity Prices
Week of February 5-9, 2001
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 88.5-432 65-140
Mid-Columbia 190-425 150-325
COB 195-425 150-325
NP 15 165-220 150-220
SP 15 150-210 125-150
Palo Verde 145-210 100-120

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


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