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Western Price Survey / Archives

March 14, 2003
Power Fades Amid Light Trading

Forecasts of warmer temperatures kept bilateral prices moving lower nearly all week, pushed in no small part by the steady retreat of fuel prices for electric generators. By Friday, trades for peak power at Mid- Columbia fetched prices as low as 32.5 mills, with prices at other hubs tracking in the upper 40 mills to lower 50 mills/KWh range.

When prices started dropping, they did so without any increases in Pacific Northwest hydropower output. Federal marketer Bonneville Power Administration had nothing to sell for Wednesday and offered a scant 100 MW of peak supplies for Thursday. "Water is just not out there," lamented one trader, who paused before adding a hopeful "yet."

That choice of words proved prophetic. On Friday morning, BPA opened the sluices, offering 600 MW of peak supplies and 500 MW of light-load power for Sunday and Monday deliveries.

Still, reports from the National Weather Service indicate that flows from the Columbia River Basin are projected to reach only 70 percent of normal levels through July.

According to other traders, market activity was light this week due to a Western Systems Power Pool conference in Scottsdale, Arizona, on March 13 and 14. The event didn't change the scheduling of any deals, but the absence of some players "makes for a quiet market," said one trader. "People are just covering their loads. There aren't a lot of marketers doing stuff" because they attended the meeting.

California spot prices this week were a bargain compared to other parts of the US. On the PJM Interconnection, the regional grid and wholesale market operator in the East, peak prices ran between 106 mills and 114 mills/KWh on Monday. At the same time in the West, heavy-load prices flitted between 60 mills and 69 mills, with some Mid-C premiums bending to the upper 50 mills/KWh range.

Light-load prices at Mid-C traveled a prairie-wide spread, playing between 25 mills and 55 mills/KWh.

Peak power at NP15 and SP15 traded in the high 60 mills range early in the week before easing to about 50 mills to 54 mills/KWh. Prices for light-load power shrank to as little as 38 mills at NP 15 and 36 mills/KWh at SP15.

At Palo Verde, prices followed suit, with peak premiums falling from 63 mills to as low as 44 mills/KWh and off-peak prices sinking to a minimum of 31.5 mills/KWh.

Electric demand on the California Independent System Operator grid remained faithful to the mid 29,000 MW level. According to Cal-ISO reports, fewer electric generators experienced unexpected outages this week. The amount of curtailed capacity resulting from unscheduled downtime totaled 1,216 MW on Wednesday morning, rising slightly at the end of the week.

As other plants reconnected to the grid, however, Duke Energy's Morro Bay No. 1 and No. 3 units remained off line (163 MW and 337 MW, respectively).

Repairs at the Columbia Generating Station appear to be progressing smoothly. The plant's ailing auxiliary diesel generator 1 successfully completed tests and analyses following work on one of the unit's bearings. The unit was running at 23 percent of capacity Friday morning and should resume full production by Monday, according to plant owner Energy Northwest.

At the Alberta hub in Canada, real-time prices for peak and off-peak power seemed to switch tendencies. Light-load power netted a high of 480.87 mills, and the top price paid for heavy-load supplies ranged lower at 331.77 mills/KWh. Peak electric demand hovered at about 8,000 MW [Jason Mihos].

Gas Sizes Up Suit of Sheep's Clothing

After entering March with teeth bared and a thundering roar, spot prices in the natural gas market could be on their way to greeting April with a different set of chops and a coat of wool. Predictions of mild weather over the next couple of weeks caused daily prices to soften, helped along by reductions in price for the April contract on the NYMEX futures exchange.

Prices vacated the $6/MMBtu range, and on Friday several hubs backed down into the neighborhood of $4/MMBtu.

The Energy Information Administration's weekly storage assessment showed that gas stocks are 117 Bcf lower than they were the previous week and have fallen by 1,007 Bcf compared to supplies available at this time last year. Western supply figures dropped by 19 Bcf (to 179 Bcf) compared to the previous week

Among Western hubs, Pacific Gas & Electric's CityGate appeared the least willing to give back recent gains. Early-week trades yielded prices as high as $7.20, and by Friday prices had moved no lower than $5.15/MMBtu.

Gas at the Southern California border and Malin also began the week at $7 and above, respectively, before retreating to the upper $4/MMBtu range. Malin traded for as little as $4.90 and Topock gas posted a low of $4.62/MMBtu.

At the basins, San Juan supplies ventured as low as $4.30 and reached a high of $4.95, with Permian gas trading between $4.65 and $6.65/MMBtu. In Canada, AECO prices wilted from the upper $6 region on Monday to about $5.07/MMBtu [J. M.].

Western Electricity Prices
Week of March 10-14, 2003
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 40.17-331.77 29.49-480.87
Mid-Columbia 32.5-63.5 25-55
COB 50-62 N/A
NP 15 50-69 38-55.5
SP 15 48-68 36-50
Palo Verde 44-63 31.5-45

Archives of the Western Price Survey for the past year are also available online.


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