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Western Price Survey

Week's End Edition
February 18, 2011
Energy Prices Recover Nominally

Western energy prices recovered slightly with some natural gas and electricity average values a little higher by Friday, Feb. 18, despite excess generation in the Northwest.

Natural gas demand fell across the United States, particularly consumption for power generation, according to the U.S. Energy Information Administration. This particularly affected futures pricing. Enerfax reported that March futures contracts have reached their lowest price since last November at $3.87/MMBtu, a level that held on Friday.

Henry Hub spot prices, at an average of $3.83/MMBtu Friday, have decreased 30 percent on a year-to-year basis.

According to the EIA, 1.911 Tcf of gas existed in storage as of Friday, Feb. 11. Stocks are now 141 Bcf below last year's level and 128 Bcf below the five-year average. This is the fourth consecutive week that stocks have fallen below the five-year average.

Western power prices were mixed over the Friday-to-Friday trading period Feb. 11 to Feb. 18.

California-Oregon Border peak power climbed about $7.05 during the trading period, closing Feb. 18 at an average of $32.59/MWh. Mid-Columbia posted a daytime average of $29.30/MWh Friday, a gain of about $4.55.

Palo Verde also posted a gain of about $1.70 compared to the week prior, ending at $31.59/MWh Friday.

South of Path 15 peak power lost $3.50, closing at an average of $36.57/MWh. North of Path 15 peak finished at $35.92/MWh, down about $1.50 versus the previous Friday.

For off-peak power, Northwestern hubs recovered from a hydro-generation glut with COB posting the greatest gains. Nighttime power at the hub ended at $17.81/MWh Friday, up about $13.80 over the trading period. Mid-C nighttime pricing also regained value, reaching an average of $16.08/MWh at Friday's close, despite trading for a low of -$4/MWh early in the week as the Bonneville Power Administration coped with excess hydropower.

California hubs' off-peak prices averaged from about $20 to $22/MWh by the end of the trading period (see chart).

San Onofre Nuclear Generating Station Unit No. 3 began powering up Friday at 2:56 a.m. following the replacement of its steam generators and refueling. The unit had been off line since Oct. 10, 2010. The $671 million project, which also included extensive work on Unit No. 2, was concluded after a decade of planning and construction. At peak capacity, each unit supplies 1,100 MW of power to the grid. Full operating capacity is expected Sunday, Feb. 20.

What's ahead: Meteorologists aren't quite sure what to expect in the week ahead. Seattle's forecast calls for possible precipitation starting Monday, Feb. 21, with temperatures in the 40s through at least Wednesday. A cold, Canadian air mass should reach the Pacific Northwest sometime Tuesday, entering Oregon Wednesday. Showers are anticipated in San Francisco Monday, with unsettled weather the remainder of the week. Temperatures should be in the 50s through Thursday. Temperatures in the Los Angeles area are expected to be five to 10 degrees less than seasonal norms, with some warming anticipated as the week progresses [Linda Dailey Paulson].

Western Electricity Prices
Week's End: February 14 - 18, 2011
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 24.87-999.99 8.34-358.58
Mid-Columbia 15-34 -4-20
COB 22-35 1-25.25
NP 15* 35-36 19-27.75
SP 15* 35.50-38 18-28
Palo Verde 24-32.25 14.25-24.25

* 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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