Western Price Survey / Archives
March 5, 2004
Deals for peak power at Mid-Columbia in the early part of this week mustered little enthusiasm for significant movement. Opening on Monday at between 41.50 mills and 42.50 mills/KWh, power prices wilted slightly on Wednesday--dropping down to 40.50 mills/KWh--before sagging to 38 mills/KWh mark at the end of the week. Trades for off-peak power drew nearly that amount for exchanges this week, moving for between 38.25 mills and 39.25 mills/KWh.
Palo Verde hub power typically attracts a higher price than other locations in the West, and this week was no exception. High-demand power drew a high of 47.25 mills/KWh on Monday before sinking to a low of 40 mills/KWh on Friday. Off-peak power stayed between 36 mills and 38 mills/KWh much of the week before losing ground in late-week deals. Despite the outages at the Palo Verde nuclear generating station, PV power did not display a gain in value during the week.
In California, NP15 exchanges did manage to gain a few mills over last week. Tuesday deals for peak power at the hub reached a high of 46.50 mills/KWh, whereas trading last week topped out at 44.25 mills/KWh. Off-peak power at NP15 matched the low-load price range at Palo Verde, though prices retained some strength at the end of the week as power changed hands for between 34 mills and 35 mills/KWh.
The peak-power price at SP15 went above 50 mills for the first time in a few weeks, hitting 50.50 mills/KWh on Tuesday. Alas, the rally was not sustained, and like prices at all the other Western hubs, peak-power values shed anywhere from two to five mills in late-week trades.
In addition to the handful of nuclear units out of service or curtailed this week, a few other large-capacity generating facilities were off line. The 900 MW Intermountain facility was listed by the Cal-ISO as being on a scheduled outage all week, as were the 407 MW Helms No. 1 pump-generating station and the 755 MW Moss Landing No. 7 unit. Compared to the approximately 8,000 MW scheduled to be off line this week, the tally of forced outages ranged from 1,500 to 2,000 MW, with few major units entirely off line [Shauna O'Donnell].
Storage and Weather Deflate Prices
Mild weather throughout the country and the availability of natural gas on the spot market led to a less-than-expected draw of natural gas from underground storage. For the week that closed February 27, the Energy Information Administration reported removal from storage of 96 Bcf, which includes withdrawal of 10 Bcf in the West. Market watchers had expected the EIA number to be more in the 115 to 120 Bcf range and the unanticipated storage figure drove spot prices downward at the end of this week.
Between Monday and Wednesday, deals at Western gas hubs steadily gained anywhere from a nickle to a dime. On Thursday, with release of the EIA figures, prices rapidly shed much of that gain.
For example, gas at Permian Basin started off the week between $4.70 and $4.91/MMBtu, topped out at $5.055 Wednesday, and quickly retreated to a range of $4.775 to $4.86/MMBtu by week's end. PG&E CityGate stuck to the same paper. Opening on Monday at between $5.22 and $5.255/MMBtu, the price scooted up to $5.47/MMBtu midweek before sinking down to between $5.27 and $5.355/MMBtu [S O'D.].
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