Western Price Survey / Archives
March 12, 2004
Power prices seemed unimpressed by the heat and clear skies throughout California. A statewide springtime heat wave that has lasted the better part of a week did not appear to move prices upward much this week. Even the transmission emergency that the California Independent System Operator called on Monday did not put much pressure on the cost of spot-market power.
The March 8 emergency was isolated to Path 26 in Southern California and was brought on by a potential for overload of the line in the north-to-south direction. Southern California Edison was forced to shed about 300 MW of load for 20 minutes just after 6:00 pm that evening.
Loads in Cal-ISO territory remained between 31,000 MW and 32,000 MW throughout the week. And though it may have had a tough time getting to load, there was ample generation available to meet demand.
No doubt the return of two nuclear units at the Southwest Palo Verde station helped keep a lid on prices, as did wilting gas prices. At the PV hub, peak power changed hands for between 41.25 mills and 45 mills/KWh on Monday, then slid down to a low of 39 mills/KWh on Thursday. Off-peak deals were consummated for between 31.25 mills and 32.50 mills/KWh at the beginning of the week before losing strength and settling at between 27.50 mills and 29.75 mills/KWh by the end of the week.
California power trades, though overall slightly more buoyant than Southwest transactions, also slipped as the week wore on. NP15 power packages were changing hands for between 43 mills and 44.25 mills/KWh at the beginning of the week but by the end of the week the commodity had lost about 5 mills in value, closing at 38 mills/KWh.
At SP15, peak power opened at the narrow spread of between 46 mills and 48 mills/KWh. Power at the hub managed to stay in that vicinity for the first three days of the week.
Deals in the Northwest tracked anywhere from three to seven mills lower than Golden State power this week. Mid-Columbia peak-load power lingered in the 38 mills to 40 mills/KWh range much of the week. The cost for off-peak power at Mid-C hit a high of 36 mills/KWh on Monday before shedding a mill or two in late-week trading. California-Oregon Border peak-time deliveries hovered near the 40 mills/KWh mark nearly all week, edging slightly downward by the end of the week. Off-peak power at COB mirrored activity at Mid-C.
The majority of power-generating units off line this week were on planned outages. Three Alamitos units--the 332 MW No. 3, 285 MW No. 5 and 485 MW No. 6--were down much of the week, as were the 724 MW Ormond No. 1 unit and 775 MW No. 2 unit. On the unscheduled side of the ledger, four units at the La Paloma facility were either shut down or curtailed a total of 767 MW sometime before 7:00 pm Tuesday evening. All four were back on line by Wednesday morning. The 900 MW Intermountain facility in Utah remained on a planned outage this week [Shauna O'Donnell].
Spot Prices Slip on Small Storage Draw
This week's Energy Information Administration data on weekly draws from underground storage showed a removal of just 28 Bcf for the week ending March 5. The prior week saw a withdrawal of 96 Bcf. Clearly, spring is on its way.
The lower demand and warm weather in the West put downward pressure on prices this week. Permian Basin gas attracted up to $5.00/MMBtu at the beginning of the week, but by Thursday, the price had dropped to the $4.74 to $4.81/MMBtu range. PG&E CityGate trading appeared to be a bit more robust, with the price of gas staying above $5.00/MMBtu all week. On Tuesday, CityGate gas slipped down to $5.16/MMBtu but gained a bit later in the week, closing at between $5.21 and $5.26/MMBtu.
For the first time this year, Pacific Gas & Electric's California Gas Transmission called an operational flow order. Because of high inventory in the system, a Stage 2 OFO with a 1 percent tolerance band was called for March 10. Another Stage 2 OFO was called for the following day, with zero tolerance provided. March 12 flows were back to normal and no OFO was called [S O'D.].
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