Western Price Survey / Archives
February 11, 2000
With few generation outages and temperate weather this week, prices in Western power markets cruised, nearly impervious to other forces at work. A mid-air collision of two airplanes near the Pacific DC Intertie on Monday morning and the continued deration of the California/Oregon Intertie's north-south line could not shake prices' reverie. Trades at the California Power Exchange stayed in the low 30 mills/KWh range, and daily loads ranged between 484 GWh and 498 GWh.
Prices were frozen in a static "no-man's land" pattern, according to one trader. Light-load supplies at the CalPX appeared nailed to the price of 27 mills, hitting a low of 26.9 mills for Thursday deliveries and a high of 27.9 mills/KWh for Monday. "I don't know what's keeping light load prices up," said one puzzled trader.
At Mid-Columbia and the California/Oregon Border, off-peak power traded in ranges of 23-24 mills and 25.75-26.25 mills/KWh, respectively. Prices for heavy-load hours showed little difference. Mid-C traded between 24.75 and 27 mills, with COB traveling in the 27-32 mills/KWh range. The nearly nonexistent spread between on- and off-peak power at Mid-C showed that that hydro supplies are not exactly flooding the market this week, according to some players. "If there was, you'd be more willing to sell it during light-load hours instead of storing it," one trader said.
Following the plane crash, the 3,100 MW DC Intertie line running from the Nevada/Oregon Border to Sylmar was shut down completely. The line's capacity was later increased to 600 MW. The California Independent System Operator's share of the line-usually around 1,900 MW-shrunk to only 300 MW this week, causing price spikes in the Cal- ISO ancillary services market, but no appreciable effects in the day- ahead market. The DC line is expected to increase capacity Thursday.
The COI, derated from 4,000 MW to 3,800 MW for maintenance work in several places on the line, was expected to return to full capacity late Thursday.
Prices in the Southwest appeared to have no response to generation outages in the region. Palo Verde trades were confined to the 29.5 mills to 32 mills range, with the spread in Four Corners prices stretching out a bit more from 23.75 mills to 31.25 mills/KWh. Off- peak energy at the two hubs kept to the low 20 mills/KWh range.
San Juan Unit 3 came back on line Wednesday morning, preceded by Four Corners No. 4, which terminated its outage Tuesday morning.
Canada's Alberta power pool saw real-time prices for off-peak supplies run higher than usual, with a low end of 18.5 mills and a high of 46.8 mills/KWh. On-peak power netted a high of 132.23 mills/KWh [Jason Mihos].
Futures Prices, High Cost of Crude Oil Coax Gas Markets
Despite a temporary dip for Wednesday supplies, cash prices for gas at Western hubs this week exhibited the same calm present in bilateral trades for electric power. Prices at most delivery points tended to follow the NYMEX futures index, which crept up toward the latter half of the week. Traders also indicated that a surge in crude oil prices is prompting users to switch to natural gas, possibly exerting upward pressure on gas premiums.
Otherwise, market activity remains mild. "The markets are well- balanced," said one trader. "We don't have any load. We're able to sell when prices look good."
Another market player said a recent American Gas Association report citing large supply withdrawals and low storage levels indicated that demand and prices could be headed higher.
Gas at the San Juan and Permian basins started the week in the mid $2.40 range, with Permian reaching $2.51/MMBtu. Permian dipped to the low $2.30s before rebounding to $2.43. San Juan hit $2.25 before notching up to $2.40/MMBtu.
Southern California Border/Topock gas mimicked that pricing pattern, trading between $2.61 and $2.64 for Tuesday supplies, about $2.55 mid- week and up to $2.59/MMBtu toward week's end. Topock prices traded approximately $0.15 higher than gas at Malin, which is a higher spread than usual. Traders attributed the difference to cooler weather in the Pacific Northwest. The point ended the week in the $2.46-$2.49 range. Malin is currently at 86 percent of capacity and undergoing maintenance work by operator Pacific Gas & Electric. Capacity levels will return to full February 19.
At the AECO hub in Canada, gas traded at about $(C) 3.04/Gigajoule, slipped to $2.92 and closed the week at $3.12/Gj [J. M.].
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