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Western Price Survey

Week's End Edition
Febuary 27, 2009
Power Prices Diverge on Rain, Sluggish Natural Gas Values

Electricity prices were mixed this week, with peak values at most hubs either falling or making negligible gains. Nighttime prices, however, rose in Northern California and the Northwest, where temperatures are colder.

At hubs in the Southwest and in Southern California, both peak and off-peak prices continued to slide, extending their losses by up to $3.

Overall, weakening natural gas prices have taken the steam out of the electricity market. Spot natural gas prices in the West fell between 20 cents to 50 cents/MMBtu on average this week, with Southern California Border gas dropping below a $3/MMBtu average on Friday. Prices ranged from a $2.51/MMBtu average at the Permian Basin in West Texas to $4.01/MMBtu at Pacific Gas & Electric's CityGate.

Natural gas prices have been sliding alongside the deteriorating economy, and likely won't increase until supply levels drop. For the week ending Feb. 25, the regional average price fell 23 cents to $4.68/MMBtu, according to the U.S. Energy Information Administration. Manufacturers, who use a third of all natural gas consumed in the country, have shaved their usage, but gas production hasn't slowed down that much. An onshore drilling boom has been slow to stop and has helped to keep inventories brimming. Henry Hub futures went for $4.20/MMBtu on Friday on Nymex.

Working natural gas in storage saw a net withdrawal of about 101 Bcf, to 1.89 Tcf for the week ending Feb. 20, according to the EIA. Storage is now 14 percent above last year and 11.7 percent higher than the five-year average.

In the West, stocks were at 296 Bcf, down 16 Bcf for the week. Inventories are now 47.3 percent and 29.8 percent above last year and the five-year average, respectively.

It will be partly sunny in San Francisco today, but rain advances back into the area on Saturday and is forecast to linger through the early part of next week. Temperatures will be in the high 50s to low 60s. Los Angeles will escape the deluge and enjoy sunny weather, with a high of 76 degrees this weekend. It's mostly sunny in Phoenix, and temperatures creep from the high 70s to the high 80s this weekend.

Since Monday, average daytime California electricity prices inched up about $1 to $35.09/MWh at North of Path 15, and tumbled over $4 to $30.08/MWh at South of Path 15. Nighttime values added almost $3 to settle at an average of $29.66/MW in the north, and drooped over $4 to $21.82/MWh in the south.

Palo Verde average trades fell $2 to $27.42/MWh; off-prime values settled down $3 to $20.49/MWh.

Power demand in the Golden State slid from 29,700 MW on Monday to 29,300 MW on Thursday, the California Independent System Operator said. On Friday, residents are expected to use about the same amount, but usage will fall to around 28,400 MW this weekend.

Rain returns to the Northwest this Saturday night and is expected to linger through Thursday of next week, AccuWeather said. Over two inches of rain may fall in the region, with mudslides and flooding a concern. Heavy mountain snow and high winds are also expected. Temperatures in Portland and Seattle, however, will remain in the high 40s to low 50s

Daytime electricity at the California-Oregon Border gained less than 60 cents to average $33.23/MWh. Off-peak trades were up over $2 to $29.68/MWh.

Average prime Mid-Columbia trades rose $1 to $32.92/MWh, while off prime values reached $31.23/MWh, up more than $4.

The second unit at the San Onofre Nuclear Generating Station has been slowly returning to full power and has lingered around 96 percent capacity this week. The 1,070 MW unit had been shuttered for maintenance. Diablo Canyon's first nuclear unit has been offline for over a month while it undergoes the replacement of its four steam generators and refueling. The 1,138 MW unit will be closed for a few months [Kristina Shevory].

Western Electricity Prices
Week's End: February 23 - 27, 2009
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 31.72-177.64 21.52-63.39
Mid-Columbia 29-38 24.50-34
COB 31.25-37.50 26-32
NP 15 32-36 22-30.75
SP 15 29-35 20-27.25
Palo Verde 26.50-30.25 19.50-24.25

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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