Western Price Survey / Archives
February 21, 2003
With electric demand still sluggish and rain falling in the West, spot prices this week appeared reluctant to give back recent gains. The return of San Onofre Nuclear Generating Station No. 3 did not seem to lower prices, which appeared to be more influenced by sagging hydro supplies and ballooning premiums in the natural gas market.
The Pacific Northwest welcomed some rain on Wednesday, though it appeared not to cause any increases in available hydropower. "There's a bunch of rain coming down right now but it's not showing up in the flows," said one trader. The storm is expected to last until Monday but will not erase worries about the area's reservoir levels, which are still below normal.
Even if the rains make for more hydro in the coming weeks, they could contribute to lower hydro output in the summer. According to one Northwestern market insider, temperature increases associated with this week's downpour can cause mountain snowpack to melt away, leaving less water for summer peak demands.
The Bonneville Power Administration offered 100 MW of peak power for Wednesday, boosted it to 200 MW for Thursday and pulled it back to 100 MW for Saturday and Sunday. BPA's off-peak offer held at 50 MW throughout the week.
Demand on the California Independent System Operator wandered up to 29,300 MW on Wednesday but generally stayed below 29,000 MW. In unplanned generation outage news, Pacific Gas & Electric's La Paloma units 1 and 3, each rated at 260 MW, stayed off line most of the week. No. 3 returned on Thursday, with No. 1 moving to a planned maintenance outage.
Duke's Morro Bay No. 3 unit continues to curtail all 337 MW of capacity, and Nos. 2 and 3 (163 MW each) went off line Thursday. AES's Redondo No. 5 has all 175 MW of capacity off the grid, and No. 6, also at 175 MW, joined the ranks of the idle on Thursday. Mirant Corp. curtailed all power at its 150 MW Pittsburg No. 1 unit this week, with the 150 MW No. 2 plant shutting off on Thursday.
At the San Onofre Nuclear Generating Complex, No. 3 ramped up to full power on Thursday. The unit began the week at 1 percent of capacity and increased production all week as it completed its refueling outage.
PG&E's Diablo Canyon No. 2 plant, also undergoing refueling, will be off line for an additional five days to address problems with the unit's steam generator tubes. PG&E ramped down the unit February 3 and had planned to begin producing power by about March 5.
For most of the week, prices at Western hubs moved in small increments. Peak prices at Mid-Columbia generally held between 46 mills and 49 mills/KWh. At NP15, prices tended to hover between 51 mills and 54 mills. SP15 prices climbed to 55 mills, and Palo Verde premiums moved between 46 mills and 50 mills/KWh.
On Friday, heavy-load prices blew 3 to 4 mills higher, and off-peak prices increased by as much as 10 mills/KWh. Light-load prices at Mid-C boomed to 53 mills, with NP15 and SP15 drawing about 46 mills to 47 mills/KWh. At Palo Verde, off-peak prices ran from 43.5 mills to 45.5 mills after trading between 35.5 mills and 37.5 mills/KWh on Thursday.
At the AECO hub in Canada, real-time prices hit a peak of 258.20 mills-at the odd hour of 7 o'clock on Friday morning. Off-peak prices reached their high for the week on the same day, rising to 51.07 mills/KWh [Jason Mihos].
Gas Responds to March Orders
Daily gas prices, taking their cue from the futures market, pushed past the $6 level at some hubs this week and even broke $7/MMBtu. Spot prices also benefited from another federal government report of low gas stocks.
Gas on the NYMEX exchange late this week traded for over $6/MMBtu for March deliveries. On Thursday, the Energy Information Administration announced that gas in storage totaled 1,168 Bcf as of February 14, down from 1,371 Bcf the previous week. Continued cold weather on the East Coast, which has been suffering from ruthless storms, is expected to draw gas supplied down even further next week.
Friday saw prices around the West barreling markedly higher. Permian Basin supplies, having surged to $5.80/MMBtu on Thursday, exploded to $7.02/MMBtu. Gas at San Juan traded for more than a dollar less, ranging from $4.39 to $4.80/MMBtu.
At Pacific Gas & Electric's CityGate point, prices floated to $5.85 late in the week before shooting to $6.30/MMBtu on Friday.
At both Malin and the Southern California border, prices rose to $5.90, and gas at the AECO hub in Canada traded for a high of $5.50/MMBtu [J. M.].
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