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Western Price Survey

Week's End Edition
February 17, 2012
Gas Prices Lift After Storage Reduction

Domestic natural gas prices got an upward nudge after a larger-than-expected storage withdrawal, but this failed to move Western power prices.

Working gas in storage reached 2,761 Bcf as of Friday, Feb. 10, according to U.S. Energy Information Administration estimates, a net decrease of 127 Bcf from the previous week. Stocks were 817 Bcf above levels last year at this time and 765 Bcf above the five-year average.

The withdrawal was slightly bigger than expected, according to Enerfax, which lent some support to natural gas futures. As for spot prices, Henry Hub gained 20 cents between Thursday and Friday to close the week at an average of $2.67/MMBtu. Both PG&E CityGate and Southern California Border gained 11 cents in Friday-to-Friday trading, with prices ending at averages of $3.01/MMBtu and $2.81/MMBtu, respectively. Both Malin and Ruby-Malin posted an average price of $2.59/MMBtu Friday, up 10 cents compared with the previous Friday.

The larger-than-expected natural gas withdrawal could be partially explained by incremental displacement of coal by natural gas, as well as nuclear outages, according to a note from Barclays. About 11 GW of nuclear capacity is currently idle, roughly 5 GW higher than the five-year average, Barclays said. That off-line capacity in the West includes the 2,200 MW San Onofre Nuclear Generating Station, where Unit No. 2 has been down for routine maintenance and refueling and Unit No. 3 went off line weeks ago after a steam-generator leak. Meanwhile, Diablo Canyon's 1,118 MW Unit No. 2 ramped down on Feb. 14 to half production for cleaning of an intake valve.

Western peak-power prices remained relatively static for yet another week. Average prices closed the Friday-to-Friday trading week at a range of $24.70/MWh at Mid-Columbia to $29.80 at SP15, which led Western hubs with a $1.20/MWh increase over the trading period.

Off-peak power in the West remained static as well, trading in a range of $20 to $22.45/MWh by the end of the week (see table).

Peak use on the Cal-ISO grid reached the week's high of 30,540 MW Wednesday evening. The grid operator's forecast shows peak use should remain less than 29,500 MW through Feb. 21. Meanwhile, demand within the Northwest Power Pool reached 55,578 MW Wednesday. The use figures both organizations are reporting are roughly on a par with the prior week's consumption.

What's ahead: A high-pressure system setting up over California early in the week is forecast to keep conditions dry. San Francisco expects to remain dry through at least Feb. 25, while the Los Angeles area, which anticipates rain on Monday, should have dry, warm weather starting Tuesday. Meteorologists say there is a slight chance of showers north of Point Conception.

The Pacific Northwest should see a series of fronts move across the region every 24 to 36 hours during the week of Feb. 20. Both Portland and Seattle expect mild temperatures around the 50-degree mark Monday through Thursday with wet weather [Linda Dailey Paulson].

Western Electricity Prices
Week's End: February 13 - 17, 2012
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 20.04-427.60 12.65-28.12
Mid-Columbia 21.50-25.75 20.75-23
COB 23.50-27.20 21-22.75
NP 15* 27.75-28.25 n/a-n/a
SP 15* 26-30.75 20.25-23.25
Palo Verde 23.50-27.75 18-22

* Prices represent both day-ahead locational marginal prices (financial swaps, or EZ Gen DA LMPs) and quasi-swap prices (EZ Gen) as reported by ICE.

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

The Western Price Survey is excerpted from Energy NewsData's comprehensive regional news services. See for yourself how NewsData reporters put events in an accurate and meaningful context -- request a sample of either or both California Energy Markets and Clearing Up.

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

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