Western Price Survey / Archives
March 11, 2005
The disquieting news of drought conditions in the state of Washington will likely weigh on the minds of power traders as we head into spring and prepare for summer electricity demand.
On Thursday, Washington Governor Christine Gregoire gave the state's Department of Ecology the go-ahead to declare a statewide drought emergency. Noting that snowpack averages were at about 26 percent of normal and that many rivers were flowing at near-record low levels, "it seems very likely that all areas of our state will experience at least some level of drought this year," said Gregoire.
Of course, drought conditions anywhere in the Northwest do not bode well for either power generation in the region or for importation to California. Traders and regulators throughout the West well remember the conditions in 2000 and 2001, when the availability of Northwest power for the Golden State was severely curtailed by drought.
Mid-Columbia off-peak power prices seemed to take their cue from the governor's announce-ment, jumping up to a high of 50.50 mills/KWh in Friday trading, around 8 mills more than the day before. Peak-time power costs in the region also moved up in late-week trading, reaching 51 mills/KWh on Friday after spending much of the week near the 48 mills/KWh mark.
California-Oregon border prices hovered in a range much like last week's spread. Recording a low of 50.50 mills/KWh on Monday, peak-power prices at the hub rose to 53.75 mills/KWh on Wednesday. Off-peak power prices could muster only minimal movement during the first half of the week, ranging from 42 mills to 44 mills/KWh. By Friday the price had soared to 49.50 mills/KWh.
Power prices in California hovered in the mid-50s this week. North of Path 15 deliveries at-tracted 55 mills to 55.75 mills/KWh on Monday, but tripped up to a high of 58.30 mills/KWh on Wednesday. The price dropped back down to 55 mills/KWh by the end of the week. Off-peak power in Northern California drew a bit of strength from the hydro concerns in the Northwest, skipping up to 44 mills/KWh on Friday.
SP15 power prices topped out at 58.25 mills/KWh at midweek, but generally stuck close to the 55 mills/KWh mark this week. Off-peak power at SP15 shadowed the cost in NP15 territory this week, ranging from 39.50 mills to 42.25 mills/KWh before hitting 43.50 mills/KWh on Friday.
In the Southwest, daytime power prices hung out in the range of 49.25 mills to 52.50 mills/KWh this week.
Southern California Edison's San Onofre Nuclear Generating Station Unit No. 2 finally re-turned to service this week following a forced outage. The unit was generating 80 percent of its 1,122 MW of capacity on Friday. The California Independent System Operator listed few other noteworthy unit outages this week. A number of facilities are on scheduled-outage status, including the 900 MW Intermountain facility in Utah that is partly owned by the Los Angeles Department of Water & Power. AES' Redondo Beach facility had a number of units off line this week, including the 178 MW No. 5, 175 MW No. 6 and 486 No. 8 units.
In other power plant news, PNM this week announced it had reached an agreement with stakeholders that details a $200 million emissions-mitigation program the utility will undertake at the coal-fired San Juan Generating Station over the next four years [Shauna O'Donnell].
Gas Follows Oil Upward
The price of natural gas on the spot market took its cue from the rise in the cost of a barrel of oil this week. As the per-barrel price closed in on the $55 mark, gas costs throughout the West ex-ceeded $6. At the Permian producing basin, the price hit $6.33/MMBtu on Wednesday, comfortably above last week's high of $6.14/MMBtu.
Gas costs at various receipt points at the California border plotted a classic bell curve this week. Monday's price at Malin was between $6.10 and $6.13/MMBtu. The hub price swelled to a high of $6.44/MMBtu on Wednesday, then slid back down to $6.11 at the end of the week. Southern California border gas drew bids of between $6.16 and $6.20 at the start of the week, moved up to $6.50/MMBtu at midweek, then dropped down to a range of $6.07 to $6.15/MMBtu in Friday trading [S. O'D.].
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