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Western Price Survey

March 2, 2007
Sun Chases Away Higher Spot Electricity Prices in Western Markets

One indication that the end of winter may be around the corner comes courtesy of Malin, Ore.

Natural gas prices at the trading point tend to heavily influence the electricity price for the California-Oregon border and for Northern California, largely because of the number of power plants that use natural gas as fuel. Up until midweek, it had been snowing almost daily in Malin, but temperatures finally broke past freezing midweek. Highs there should be in the 50s this weekend.

With melting snow, as one might expect, natural gas prices in Malin dove midweek, moving below $7/MMBtu and winding up at $6.80/MMBtu on Friday. Electricity prices at the California-Oregon border fell in tandem. Peak power, which had traded a bit above 60 mills/kWh most of the week, fell to about 55 mills/kWh for Friday-Saturday packages as well as Monday deliveries. Off-peak power dropped to about 53 mills/kWh in Friday trading, a few mills below early-week prices.

Mid-Columbia peak power dropped to between 48 mills and 54 mills/kWh in trading Friday, though it had gone as high as 65 mills/kWh for Wednesday deliveries. Nighttime power was between 46 mills and 52 mills/kWh in Friday trading, though it was priced in the mid-to-high 50s much of the week.

California prices also dropped on warmer weather. San Francisco will have highs in the 60s through Monday, and Los Angeles will see highs in the 80s. Power values acted accordingly. Peak power at North of Path 15 and South of Path 15, priced in the low-60-mill range early in the week, dropped to around 58 mills/kWh in trading Friday. Nighttime power was steadier, however. It traded for about 49 mills/kWh Monday, dropped to a low of 47 mills/kWh for the Friday-Saturday package, then gained a few mills in trading on Friday.

At Palo Verde, daytime power was at around 55 mills/kWh on Friday, down from a high of 60 mills/kWh set on Monday. Off-peak power went for around 48 mills/kWh for Monday deliveries, a jump of a few mills from values traded most of the week.

The California Independent System Operator reported relatively stable demand on the grid this week between 32,077 MW and 32,761 MW. On Thursday more than 8,337 MW was curtailed from the grid, mostly from planned power-plant outages. One exception was the 904 MW Huntington Beach plant, where three of four units were listed as unplanned outages Thursday by the grid operator.

The 1,314 MW Unit No. 2 of the Palo Verde Nuclear Generating Station was listed at full capacity on Friday by the U.S. Nuclear Regulatory Commission after being shut down last week for an oil leak. The NRC, however, has downgraded the safety level of the entire 3,810 MW nuclear reactor, making it one of the nation's most scrutinized nuclear facilities (see story at [14]).

The 525 MW Elk Hills plant also returned to service Tuesday after being shut down for 20 days after an explosion at the natural gas plant injured four workers [Chris Raphael].

Natural Gas Values Fall on Expected Storage Withdrawal, Warm Weather

The U.S. Energy Information Administration Thursday reported that 132 Bcf of natural gas was withdrawn from storage for the week ending Feb. 23. Approximately 98 Bcf was taken out in the East, 10 Bcf in the West and 24 Bcf in producing states.

Traders saw the withdrawal as expected, however, and natural gas futures tumbled in trading. With spring approaching, storage levels are also in good shape from the winter gorge. Eastern stocks are still 8.6 percent above the five-year average, while the West is 7 percent above and producing states are 18 percent above.

Southern California border gas dropped below $7/MMBtu on Wednesday as warm weather moved into the West. By Friday it was trading between $6.73 and $6.83/MMBtu.

Gas at the San Juan Basin was priced tightly Friday between $6.41 and $6.49/MMBtu, a decline of about 40c compared to Monday prices. Permian Basin natural gas traded for $6.42 to $6.54/MMBtu on Friday, though it had flirted with $7/MMBtu earlier in the week [C. R.].

Western Electricity Prices
Week's End: Feb. 26 - March 2, 2007
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 33.53-387.22 6.79-196.09
Mid-Columbia 48.25-65 46-59
COB 54-64.25 47.75-52.25
NP 15 56.50-66.75 47-52.50
SP 15 56.25-66.75 47-52.50
Palo Verde 52.25-60.50 43-49.25

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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