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Western Price Survey / Archives

March 15, 2002
Power Markets Looking Up in Face of Nuclear Curtailments

Some power sellers may be trying to make more of it than the situation warrants, but the word of two significant nuclear unit curtailments beginning this weekend added to an upward movement in power prices late in the week. In trading for Monday deliveries, prices at Mid-Columbia and California/Oregon Border shot up to the 56 mills to 59 mills/KWh range, with off-peak rising to 45 mills/KWh. Southwestern prices climbed to the 44 mills to 45 mills/KWh vicinity for peak power.

Both nuclear situations have been worked into schedulers' plans for a long time. Palo Verde No. 2 will begin a month-long refueling outage at midnight Friday/Saturday. Set for 37 days, the outage may be accomplished in 32, if operators at Arizona Public Service get everything according to plan.

The other outage, a brief, 20-percent ramp down of capacity at the Columbia Generating Station on Saturday was also planned a long time ago, said Energy Northwest spokesperson Don McManman. But that did not stop the NW rumor mill from circulating word that the unit was going into a forced outage.

Another factor in a sudden upward shift in prices for the weekend was a blast of cold weather over Northern California that may last a few more nights, plus a scheduled derating of the southbound California/Oregon Intertie to 3,000 MW for repair work on Saturday. The price at the California/Oregon Border shot up to 36 mills/KWh on Bloomberg's index Thursday, although other traders said the typical transaction was in the 32.5 mills to 34 mills/KWh range.

Still, those mid-30s prices that have marked the spot market are higher than people were expecting for this time of year. Helping to prop up the floor are natural gas prices that approached the $3/MMBtu mark this week (although retreating later) and continued uncertainty about precipitation in the Pacific Northwest, especially after a poor showing in February. Rainfall above The Dalles is currently about 96 percent of average, although the most recent snow pack volume forecasts show 107 percent.

Though not as good as "normal"-at least as measured in the 1995-2000 period-federal hydropower generation is at least much better than last year. The final figures from BPA for production out of the federal dam system during February was 30 percent higher than last year but almost 30 percent below the average for the month. That might improve with another storm forecast for the weekend and early part of next week.

Loads on the California Independent System Operator's grid rose to 30,400 MW midweek but were expected to tail off Friday. The Cal-ISO outage list was steady at 12,000 MW to 13,000 MWeach morning, with mostly the "usual suspects" reporting out for planned maintenance or economic shutdowns.

Given the big jump in pricing for next week, the past week's volatility seemed tame. Mid-Columbia bounced between 28 mills and 33.5 mills/KWh, with off peak power eroding from 27.5 mills to 25 mills/KWh. COB was generally 31 mills to 32 mills/KWh with NP15 tracking higher to the 32 mills to 34.5 mills/KWh range. SP stretched to 37 mills, for a fairly broad range during the week as it was 31 mills/KWh at the start. The overnight prices had been 26 mills to 29 mills but rose above 30 mills/KWh on colder nighttime temperatures.

At Palo Verde there was a slow but steady increase in prices from 30 mills on Monday to as much as 34 mills/KWh for peak and 25 mills to 27 mills/KWh off- peak [Arthur O'Donnell].

Gas Floats Around $3/MMBtu Level but Lands Lower

Gas markets were torn by adherence to rising forward markets and the realization that winter is nearly over with lots of supplies left in storage. While prices moved higher early in the week to reflect expectations of cold weather-related demand and the NYMEX jump above $3/MMBtu for April and May, the prices slid mightily after Wednesday's release of AGA storage figures. The weekly pull out of 140 Btu was higher than last year's figure, but storage levels remain at about 1.6 Tcf with just a few weeks left in the withdrawal season. From that point on, NYMEX and every other hub, except Malin and Opal, went into retreat with the key Western point at Topock landing at $2.81/MMBtu or so.

The Malin price was affected by more local concerns, a 300 MMcfd curtailment on the Kern River pipeline put pressure on Opal, Wyoming, reservations that translated into a run on Malin, which held on to the $2.91/MMBtu price mark.

The ups and downs led to wide spreads in gas prices and uncertainty about future trends [A. O'D.].

Western Electricity Prices
Week of March 11-15, 2002
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 32-61 17-36
Mid-Columbia 28-33.5 25-31
COB 31-36 26-30
NP 15 31-36 26.5-30
SP 15 31-37 28-30
Palo Verde 30-34 25-29

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


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