Western Price Survey
Week's End Edition
Two former Enron Corp. traders on Wednesday got off easy from charges they manipulated energy prices by selling power outside California during blackouts and then moving it back into the state during the Western energy crisis of 2000-2001.
The men, Timothy Belden and Jeffrey Richter, were sentenced to two years of court-supervised release. A third trader, John Forney, the alleged ringleader of the scheme, will be sentenced next month.
This week wholesale electricity prices were apparently manipulated by the weather and the unusual trading schedule. For a while, it appeared that electricity prices would stay as static as demand, which hovered tightly between 30,500 MW and 31,000 MW, as reported by the California Independent System Operator.
But next Monday is a holiday, so prices moved lower on Wednesday, when Friday and Saturday packages were swapped. Prices rose for Monday deliveries, which were traded Thursday, and jumped again for deliveries next Tuesday, which were traded Friday.
Traders also anticipated delivering electricity in colder weather this coming Monday and Tuesday, which may explain some of the late-week price jumps. Temperatures in Los Angeles, for instance, are expected to be 80 degrees tomorrow, but will fall to 68 degrees by Tuesday. Foggy San Francisco, which has been blessed with highs in the upper 60s, is expected to drop to its usual winter-high-below-60 self on Monday and Tuesday.
North of Path 15 and South of Path 15 peak power was at about 60 mills/kWh through Wednesday, but rose a few mills for Monday deliveries and reached about 65 mills/kWh for Tuesday deliveries. Off-peak power, priced between 45 mills and 50 mills/kWh through midweek, went as high as 57 mills/kWh in Thursday trading, then retreated back to 50 mills/kWh in Friday trading.
Peak power at Palo Verde was in the mid-50 mills/kWh range through Wednesday, but gained a few mills on Thursday, and more on Friday when the commodity went for about 60 mills/kWh. Nighttime power climbed all the way to 53 mills/kWh for deliveries next Monday before falling to about 45 mills/kWh for Tuesday.
In the Northwest, Mid-Columbia peak power went much of the week in the range of 50 mills to 55 mills/kWh, then rose to about 59 mills/kWh in trading today. Off-peak power went for about 53 mills/kWh in Thursday and Friday trading, up 5 or 6 mills from start-of-the-week values.
Daytime power at the California-Oregon border, at a modest 56 mills/kWh Monday, swung wildly between 58 mills and 67 mills/kWh on Thursday and settled at around 62 mills/kWh in trading today. Off-peak power closed the trading week at about 55 mills/kWh, up about 5 mills from its trading range for the week [Chris Raphael].
Gas Prices Have a Trampoline Week
The U.S. Energy Information Administration on Thursday reported a storage withdrawal of 259 Bcf for the week ending Feb. 9, putting total stocks about 200 Bcf below last year's levels.
Even though another large storage withdrawal is expected next Thursday from a snowstorm that hit the Midwest and East this week, Western natural gas prices did not seem affected. Prices at Western hubs actually jumped on Wednesday, then fell the next two trading days despite the storage news.
Southern California border gas went a bit above $7/MMBtu to start the week, reached a high of $7.26/MMBtu in Wednesday trading, then dropped in trading today, for deliveries next Tuesday, to nearly the same value as deliveries this past Tuesday.
It was the same story for Malin gas, which can drive the price of electricity at the California-Oregon border and North of Path 15 [see story at ). Malin gas traded at about $7/MMBtu for deliveries last Tuesday, rose to $7.16/MMBtu in Wednesday trading, and was back again around $7/MMBtu for Saturday-through-Tuesday deliveries. At the Southwest basins of Permian and San Juan, natural gas was priced below $7/MMBtu most of the week, except for Wednesday [C. R.].
Archives of the Western Price Survey for the past year are also available online.
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