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Western Price Survey / Archives

Febuary 20, 2004
Laggardly Market Lulls Prices to Sleep

"There's nothing dramatic going on anywhere," remarked one trader about this week's electricity-market activities. There was a "downward creep" in prices throughout the week, as one trader put it. Having started a day late because of the Presidents' Day holiday, electricity-market dealers easily found themselves at least a dollar short by the end of the week.

"Nothing dramatic anywhere" seemed to be the general consensus among market players.

Peak-power deals at Mid-Columbia sagged to a low of 38.75 mills/KWh in Thursday trading, having managed to stay between 40.75 mills and 42 mills/KWh earlier in the week. Friday trading for Monday deliveries displayed a bit more life; prices moved back up to between 41 mills and 41.50 mills/KWh. Off-peak power prices stayed in the vicinity of between 38 mills and 40.75 mills/KWh before sinking to 35.75 mills/KWh in end-of-week trading. At the California-Oregon Border hub, peak power was moving for between 42.50 mills and 44 mills/KWh on Tuesday, but also lost strength later in the week. By Thursday, the price was down to between 40 mills and 41.50 mills/KWh.

Deals done at the Palo Verde hub in the Southwest had trouble staying above the 40 mills/KWh mark this week. Though trading opened Tuesday at between 41 mills and 43.25 mills/KWh for peak offerings, by Thursday the price at the hub was down to 38.50 mills/KWh. Next-week deliveries were moving for 43.25 mills/KWh on Friday. Off-peak power also lost a few mills as the week wore on, starting off at between 34 mills and 36 mills/KWh prior to dropping to a low of 29.75 mills/KWh on Thursday. Again, the price jumped up on Friday--up to 37.25 mills/KWh.

At NP15, peak power changed hands for between 45 mills and 47 mills/KWh in early-week trading. By the end of the week, power was being bought and sold within the narrow band of 42.45 mills and 43.75 mills/KWh. Low-demand power deals were done for between 38 mills and 40 mills/KWh on Tuesday before slipping to the 33 mills to 35 mills/KWh range on Thursday.

SP15 power displayed a bit more strength than NP15 prices during the first part of the week, but just barely. Power for peak-time delivery at the hub traded for between 46.50 mills and 48 mills/KWh, while off-peak power moved for 35 mills to 37.50 mills/KWh. Off-peak prices perked up to a high of 39.50 mills/KWh at the end of the week.

On Wednesday, transmission constraints in the Central California corridor reduced transfer capacity between Northern and Southern California. Work on a 500 KV capacitor bank at the Los Baņos Substation required the derate of Path 26 to 2,600 MW in the north-to-south direction, while Path 15 was curtailed to 2,950 MW of capacity in the south-to-north direction. Scheduled work in the Pacific Northwest dropped the Pacific DC Intertie down to 1,086 MW north to south and 1,070 MW south to north on both Tuesday and Wednesday.

The San Onofre Nuclear Generating Station Unit No. 2 continues on a refueling outage and many of the major outages noted last week continued into this week. The 750 MW Four Corners No. 4 continued on a planned curtailment of 355 MW this week and was joined on Friday by Unit No. 5, which was forced to curtail 350 MW of its 750 MW capacity.

Palo Verde's 1,352 MW No. 2 nuclear-generating unit tripped off line late Thursday afternoon. According to a news release distributed by the plant operator, Arizona Public Service, monitors detected a small tube leak in one of the unit's two steam generators. The new steam generators had been installed two months ago during a refueling and maintenance outage. With trading for the week completed at Western hubs, the loss of the unit was not reflected in prices. APS has given no estimate when the unit will return to service [Shauna O'Donnell].

Downward Slide Continues in the West

Natural gas prices in the West continued on a downward slide this week, with deals at many hubs managing to stay below the $5.00/MMBtu mark. Permian Basin gas was driven down to $4.68/MMBtu in mid-week trades, more than two bits less than last week's price.

Southern California Border gas spent much of the week in the vicinity of $4.95/MMBtu. The hub price opened the week at between $5.00/MMBtu and $5.19/MMBtu, but quickly lost steam and joined the competition, closing the week between $4.95 and $5.00/MMBtu.

The Energy Information Administration recorded a draw of 172 Bcf for the week that closed on February 13. Currently, underground storage reserves in the Lower 48 are 6.2 percent less than the five-year average. For the West, there is 15 percent less gas in storage compared to the five-year average [S O'D.].

Western Electricity Prices
Week of February 17 - 20, 2004
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 17-200.07 10.50-62.08
Mid-Columbia 38.75-42 38-39.25
COB 40-44 35.50-41
NP 15 42.40-47 33-40
SP 15 41-48 34-39.50
Palo Verde 38.50-43.50 29.75-37.25

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


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