Western Price Survey / Archives
March 9, 2001
In one sense, this week's power market was a mirror image of last week's activity. While the previous Wednesday featured a huge run-up in power prices due in part to unit outages, cold weather and an emergency declaration by the California Independent System Operator, this week saw prices plunge midweek on warmer weather, the return to service by generators and dissipation of a Cal-ISO alert called earlier.
In both cases, the midweek volatility was measured at over 125 mills/KWh at most market hubs, but in this case it was a trough instead of a peak.
The resulting power price spreads covered a pretty wide gulf, running between 220 mills and 350 mills/KWh at the California/Oregon Border and Mid-Columbia and between 145 mills to 325 mills/KWh at Palo Verde.
There was a bit of a bounce noted by marketers but since prices began the week at fairly high levels, the going rates eventually dropped below the ranges seen Wednesday.
By Friday, Mid-C centered at 220 mills to 230 mills/KWh, COB ran about 5 mills/KWh higher. NP 15 moved between 175 mills and 200 mills/KWh, and SP 15 slipped to 155 mills to 160 mills/KWh. Palo Verde settled at 145 mills to 165 mills/KWh. Off-peak prices were mainly 150 mills to 200 mills/KWh in the northern areas, 120 mills at SP 15, and 90 mills to 105 mills/KWh in the Southwest.
The California Independent System Operator's list of unplanned outages got shorter this week, although some units were moved over to the planned maintenance side of the list. Just about the entire Long Beach facility was reported under repairs, nine units in all. Also out on Wednesday were two Colgate hydro units, El Segundo No. 4 and Mandalay No. 4.
Palo Verde Unit No. 2 experienced a minor limitation on output early in the week as operators installed a new flow meter, but it was back to full output Wednesday.
San Juan No. 2 was reported back in service Tuesday, and the two 670 MW units at Centralia in Washington were reported back on line by owner TransAlta. California began the week with a Stage One alert on Monday-with imports dropping to just 1,855 MW from nearly 5,000 MW the day before-but the situation eased as loads diminished and the rest of the week was quiet.
After a shaky start, the Alberta Power Pool found its groove on moderate loads and a remarkably flat price curve, dropping to 98 mills/KWh for days and the 9.5 mills to 32 mills/KWh at night [Arthur O'Donnell].
Gas Demand Drops Enough to Allow Storage Injections
The trend in Western gas markets was all downward this week, as moderating loads, return of pipeline capacity and a generalized sense of acceptance prevailed. Prices, which had started out above $28/MMBtu at the Southern California Border, were cut by more than half. Other hubs saw price erosion but nowhere near as steep as at Topock.
"This may just be turning around here," said a relieved gas buyer, noting that there was more than enough gas coming into the state to allow net injection at storage facilities operated by both Pacific Gas & Electric and Southern California Gas.
"We won't see storage pulls like we had," noted another trader. "The forecast is for warmer weather."
As some 300 MMcfd went back into SoCal Gas storage, and PG&E set aside as much as 215 MMcfd for the future, price pressures eased. By Thursday Topock fell to the $12 to $13/MMBtu range and one buyer called it "almost a decent price."
Another observed, "I think it's amazing how people are comfortable with that price." Especially since it's about four times higher than that of a year ago.
Basin prices dropped from near $5.20/MMBtu to the $5 to $5.05 range at San Juan and $5.05 to $5.10/MMBtu vicinity at Permian.
Malin dropped to $8 from $10/MMBtu earlier in the week, but the PG&E CityGate stayed in a tight $9.50 to $10/MMBtu range.
Alberta hub prices dropped from $(c)7.49/Gigajoule on Monday to $7.39/Gj Thursday [A. O'D.].
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