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Western Price Survey

Febuary 15, 2008
Power Values Rise on Natural Gas Pressure, Holiday Trading

Power prices turned around and ended the week up on higher natural gas prices and a holiday trading schedule. The markets will close Monday for Presidents Day, so traders bought and sold electricity a day earlier.

Values were actually headed lower through Wednesday, down from $3 to $5 at each Western trading hub. But on Thursday, prices reversed and shot up as traders bought and sold electricity for Sunday and Monday. Values ended the week about $1 to $2 higher than Monday.

At the California-Oregon border, average peak power prices rose about $1 to an average of $73.53/MWh. For off-peak power, prices climbed about $1 to an average of $62.88/MWh on Friday.

The Mid-Columbia trading hub saw price gains of $2 to an average of $70.43/MWh for prime electricity. Nighttime power eked out nearly a $2 increase to $61.76/MWh.

Prime power at North of Path 15 climbed from an average of $77.17 on Monday to $79.01/MWh on Friday. Off-prime values only managed a 30-cent rise, ending Friday at an average of $59.88/MWh.

South of Path 15 peak electricity prices soared $2 to $78.68/MWh, while off-peak prices increased 50 cents to an average of $59.71/MWh.

Average daytime power at Palo Verde inched up 50 cents to $69.15/MWh. Nighttime power slipped a modest 14 cents to an average of $53.20/MWh.

Portland continues to enjoy sunny skies and balmy temperatures in the mid-50s. Seattle expects rain through tonight, but hopes to see the sun this weekend. San Francisco will enjoy temperatures in the low 60s and sunny skies through the weekend. It will be the same in Los Angeles, with temperatures in the high 60s.

The Santa Ana winds, which hit 75 mph this week in areas of Southern California, have largely dissipated now that the storm system has moved east. Palm Springs will see wind gusts reaching as high as 25 mph, but skies will be sunny and temperatures in the mid-60s to mid-70s. Phoenix expects rain tonight, with sunny skies returning over the weekend and pushing temperatures into the mid-70s.

The second unit at the Diablo Canyon nuclear power plant is down for two months for refueling and the replacement of four steam generators. The 1,130 MW unit is on the biggest planned outage in the facility's history.

This summer should be cooler than last year's and drive down energy demand, the U.S. Energy Information Administration reported this week in its short-term energy outlook. EIS forecasts power use to increase 0.4 percent in 2008 and 1.6 percent in 2009. With less need for peaking generation, however, prices would grow only 1.8 percent this year and 2.7 percent in 2009 [Kristina Shevory].

Cold Drives Natural Gas Price Rise

Frigid temperatures pushed up space heating demand and consequently natural gas prices across much of the country this week. It was a marked contrast from last week, when prices ignored cold weather and dropped. In the West, prices inched up around 30 cents, with average prices ranging from $8.03/MMBtu Friday at San Juan to $8.67/MMBtu at Pacific Gas & Electric's CityGate.

However, the price gains may be fleeting. With above average snowpacks and more storms expected in the coming weeks, hydropower will likely dampen demand for natural gas this year. The U.S. Energy Information Administration forecasts larger melting snow runoff starting in April.

Natural gas supplies shrank by 120 Bcf last week across the country to 1.942 Tcf, the EIA reported. There is nearly 9 percent less natural gas in storage nationwide than at the same time last year, but supplies are still 6 percent above the five-year average.

The Western states used 27 Bcf of natural gas last week, with supplies falling to 227 Bcf. The drawdown left stockpiles 15 percent lower than last year and 13 percent below the five-year average.

Last year, Henry Hub gas prices were $7.17 Mcf on average, and will likely rise to $7.83 this year and $7.93 in 2009, according to the EIA's short-term energy outlook. Production of natural gas is estimated to climb 2.2 percent this year and 0.8 percent the following year because of new deep underwater wells in the Gulf of Mexico and new unconventional sources in the continental U.S. [K. S.].

Western Electricity Prices
Week's End: February 11 - 15, 2008
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 33.95-316.85 17.06-119.91
Mid-Columbia 62.25-72 56.75-64
COB 66.50-74.75 56.50-65
NP 15 72.25-79.50 54.25-64
SP 15 71.50-80 54-63.75
Palo Verde 54.75-72 49.50-57

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


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Contact Chris Raphael, editor with questions regarding Price Survey Content.

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