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Western Price Survey

Febuary 24, 2006
Power Values in Late-Winter Funk

With the prospects for warmer weather to flow into the Golden State from the Pacific shortly looking fairly good, electricity values pretty much stagnated this week.

Trading at the Mid-Columbia hub opened the week at between 51 mills and 54 mills/KWh and remained in that range at midweek. By Friday the price had fallen off to a low of 48 mills/KWh. Off-peak power traded at Mid-C for between 46.25 mills and 49.50 mills/KWh this week.

Moving south, the California-Oregon border peak-power price topped out at 60 mills/KWh at the start of the trading week, which occurred on Tuesday on account of the Presidents' Day holiday on Monday. COB values lost a bit of ground on Wednesday, slipping to between 55.25 mills and 57.50 mills/KWh. The swoon continued into Friday, when peak power at the hub moved for a low of 51.50 mills/KWh. Low-demand power prices barely moved this week, sticking to a range of 47.25 mills to 50.50 mills/KWh.

California deliveries were stuck in the low sixties during the early part of this week. Deliveries of daytime power slated for North of Path 15 territory attracted a high of 63 mills/KWh on Tuesday, while South of Path 15 power hit 63.75 mills/KWh that same day. By Friday the price of peak-time power at both hubs had sloughed off a few mills. Nighttime deliveries at SP15 stayed within the range of 48.50 mills to 51 mills/KWh until Friday, when the price peaked at 53 mills/KWh. NP15 followed suit, sticking mostly to the 49 mills to 50 mills/KWh zone, managing to top out at the end of the week at 52.75 mills/KWh [Shauna O'Donnell].

Alaska Pipe Dream Will Require Higher Gas Prices

Tuesday's announcement by Alaska Governor Frank Murkowski that his state had reached a deal with three major oil companies on a plan to bring natural gas now sitting idle in the North Slope down to the Lower 48 demonstrates the increasing importance of the fuel in the United States. How long it will take and how much it will cost to build the 3,600-mile pipeline that would carry the gas south will factor significantly into a determination of the value of the project, as will the future price of the commodity.

Current Western gas prices, while about 20 percent higher than at this time last year, are a far cry from the double-digit prices recorded late last summer. As the winter heating season wanes and withdrawal of gas from storage slows, the downward pressure on prices could push spot gas values below the $6 mark. Any significant and sustained lowering in the price of natural gas throughout the country surely will make the Alaska project much less attractive.

At the Texas producing basin at Permian this week, gas traded for a low of $6.10/MMBtu, reaching that nadir on Friday. San Juan Basin gas opened the week trading for between $6.61 and $6.68/MMBtu, but skidded down to a range of $6.18 to $6.275/MMBtu on Friday.

Gas delivered to the Northern California receipt point at Malin moved for a high of $6.70/MMBtu on Wednesday, but slipped down to between $6.40 and $6.55/MMBtu the following day. Gas delivered to the Southern California border point at Topock attracted a high of $7.05/MMBtu on Tuesday before slipping to a range of $6.40 to $6.60/MMBtu in late-week trading [S. O'D.].

Western Electricity Prices
February 20 - 24, 2006
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 47.94-241.42 44.56-55.50
Mid-Columbia 48-54 46-49.50
COB 51.50-60 47.25-50.50
NP 15 54-63 47-52.75
SP 15 54.15-65 47-53
Palo Verde 53.75-60 45-51

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.

Please contact with questions or comments about this site.

Contact Shauna O'Donnell, editor with questions regarding Price Survey Content.

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