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Western Price Survey / Archives

February 15, 2002
The Rise and Fall of Power Markets

Prices go up, prices go down. That pretty much explained the market dynamics during a holiday shortened trading week. Most of the action took place on Tuesday as a $0.25 to $0.30/MMBtu run-up in natural gas prices pulled electricity up by 4 mills to 6 mills/KWh at most Western hubs.

The effect was transitory, however, and power prices soon took a downward slide as schedulers put together packages for Thursday/Friday and Saturday/Sunday deliveries. Whether the pre-arranged deals for the Monday Presidents' day holiday follow the pattern remains to be seen. A snowstorm predicted for the holiday weekend could change the market dynamics a little.

Mid-Columbia was seen lagging the rest of the market, not only starting the week at a much lower rung on the pricing ladder but appearing reluctant to give up the somewhat higher prices. Part of the reason was a more conservative water management regime being followed by river operators as snow pack and runoff projections were revised downward (ever so slightly).

Also an unplanned outage at the Columbia Generating Station may have been a factor. Operators disconnected the nuclear facility from the grid at 12:45 pm on Thursday while engineers examined a potential problem with breaker switches.

On Tuesday, during routine testing of one of the station's three backup diesel generator sets, abnormal wear was found in a breaker switch. The wearing interfered with the mechanism's proper function and operating rules required the unit to start a shut-down sequence at about 10 pm Wednesday.

The outage is expected to last a few days. Other work to be performed during the outage, said a spokesperson for Energy Northwest.

Except for the Northwest's low peak price of 17.5 mills/KWh at the start of the week, Western prices were pretty much contained to the 20s. Mid-C rose to 23 mills but settled in the 19.5 mills to 20.5 mills/KWh bracket.

The California/Oregon Border rose and fell within the 21 mills to 25 mills/KWh range. NP15 and SP15 set the high end of the market, climbing to 29 mills and 28 mills respectively before eroding to 25 mills/KWh.

Palo Verde barely roused from the 21 mills to 26 mills/KWh mark, but was also down as low as 20.5 mills/KWh heading into the weekend. Off-peak energy in the Southwest was especially weak in the 14 mills to 16 mills/KWh range. Nearly everywhere else the standard overnight price quote went down to 18 mills/KWh.

Load continue to be mild in California, with the Independent System Operator chalking up just about 31,000 MW at peak each day. The 12,000 MW of unit outages do not seem to pose any problems and even with the Columbia nuke off line, there is lots of reserve capacity.

There was some volatility noted on the Alberta Power Pool with hourly prices popping up to 81 mills/KWh on occasion, but nothing sustained and pool loads remain moderate [Arthur O'Donnell].

Gas Prices Follow the Leader

Local purchasing patterns and national storage withdrawals notwithstanding, the Western gas market took its cues from the NYMEX screen this week, rising and falling in line with the Henry Hub.

One big buyer noted that last week it was a big buyer but did not seem to have any impact on prices. As it mostly sat on the sidelines this week, it watched prices rise by $0.25 to $0.30/MMBtu.

Another unusual trend was that the San Juan Basin price stayed a penny above the Permian prices, although the two hubs moved to the same rhythms, rising to nearly $2.30/MMBtu then slipping to $2.15/MMBtu.

The Southern California Border reached a high for the year at $2.47/MMBtu but also settled to $2.26/MMBtu on the ICE index.

The Alberta price varied between $2.90 and $3.12/Gigajoule, but lacked any sense of firm direction [A. O'D.].

Western Electricity Prices
Week of February 11-15, 2002
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 12-81 9.7-16
Mid-Columbia 17.5-23 18-22
COB 21-25 17-18.5
NP 15 23.5-29 17-18.5
SP 15 23.5-28 18-20
Palo Verde 21-25.5 14-16.5

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


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Contact Shauna O'Donnell, editor with questions regarding Price Survey Content.

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