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Western Price Survey

Week's End Edition
February 25, 2011
Plentiful Western Supplies Driven by Shale, Wind

In addition to excess hydro, booming natural gas production and record wind generation are responsible for plentiful Western energy supplies and lower prices.

Western natural gas prices continue to be driven by market fundamentals, said Gordon Pickering, director of Navigant Consulting's fuels-analytics practice. He added that gas prices remain low for this time of year. Surplus gas continues suppressing prices, though short-term prices can be affected by weather and other factors.

The recent rise in oil prices to 30-month highs does not seem to be affecting Western natural gas or, in turn, electricity prices. By Friday, Feb. 25, Malin gas earned 10 cents over the previous Friday to close at $3.95/MMBtu. Over the same period, Southern California Border and PG&E CityGate gas gained just pennies to $3.89 and $4.06/MMBtu, respectively.

Wind generation on the Bonneville Power Administration transmission grid reached a record of slightly more than 3,000 MW Tuesday, Feb. 22. Hydro output for the week peaked above 14,000 MW the next day. Growing loads at BPA, and in the Northwest Power Pool as a whole, however, kept prices afloat (see graph above). The situation was inverse in California, where loads and prices both fell.

Over the Friday-to-Friday trading period, California-Oregon Border and Mid-Columbia daytime power gained $1.65, with COB posting an average of $34.25 Friday and Mid-C at $30.94/MWh.

For average peak power at California hubs, North of Path 15 lost about 40 cents to $35.50/MWh and South of Path 15 lost about 50 cents, ending at $36.04/MWh. Palo Verde power, meanwhile, gained about 90 cents to $32.47/MWh.

Over the Friday-to-Friday trading period, average nighttime power prices at Western hubs gained between $3 and $5/MWh. Western prices ranged from about $20 to $26.40/MWh at close of trading Friday, with Mid-C pricing the lowest (see chart).

What's ahead: Rain and periodic blustery conditions are expected in Washington and Oregon starting Monday, Feb. 28. Mountain snowfall is predicted Monday through Thursday, turning into rain at lower elevations. Regional temperatures should be in the 40s for the period. After dry weather Monday, the San Francisco area should have rain Tuesday through Thursday. Meteorologists say the best likelihood of rain in the area is Wednesday. Los Angeles may see some rain by Thursday after a mostly sunny week with temperatures in the 60s.

Western temperatures should remain below normal throughout the spring, according to the National Weather Service Climate Prediction Center. Continued La Niña conditions mean lower temperatures for Washington and Oregon, possibly into Central California, extending through the April-May-June forecast period [Linda Dailey Paulson].

Western Electricity Prices
Week's End: February 21 - 25, 2011
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 23.50-746.94 8.34-41.03
Mid-Columbia 28.50-36.75 12.75-24.50
COB 33-39 15-24
NP 15* 34-37 23-26.25
SP 15* 33.90-37.50 21.25-27
Palo Verde 29.50-34.75 18-25.50

* 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.


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

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