Western Price Survey / Archives
March 17, 2000
Actual trading activity was low and customer demand surprisingly light, but transmission constraints on key paths into California were the biggest drivers of price fluctuations this week. While advance prices for weekend deliveries are usually lower, that was not the case at the California/Oregon Border this week. Severe cuts to the Pacific Intertie system drove COB prices to near 40 mills/KWh on Thursday.
The Southwest market took an early hit in the form of a maintenance curtailment on the 500 KW line between Palo Verde and Gila substation. That key path into California was trimmed to 1,363 MW of its usual 2,958 MW rating, isolating power in the desert where it was not really needed and driving prices higher in Southern California.
This was especially reflected in a low 10.6 mills/KWh off-peak price on the AZ3 zone for the California Power Exchange on Monday. At Palo Verde, daytime prices were depressed to 23.5 mills/KWh because sellers could not get into the Cal-PX and had to bid down to obtain transmission.
After the line work cleared, a large 740 MW unit at Four Corners tripped late on Tuesday, helping drive Palo Verde prices up to about 32.5 mills/KWh. Still the Cal-PX AZ3 price was a low 24.5 mills/KWh for peak hours, not that much different than the off-peak 24.5 mills/KWh constrained price.
An even bigger hike was recorded at COB in anticipation of a 600 MW limit on both north and south flows on the AC Intertie on Saturday and Sunday. Additionally, the DC Intertie is scheduled to be out of service completely March 18-19.
Northwest power has not come down at all this spring, and off-peak prices especially remained unusually high at 25 mills to 25.5 mills/KWh. The Peak price slipped a little from 28.5 mills Tuesday to 27 mills into the weekend, leaving not much of a spread between day and night.
Despite all the turmoil in bilateral markets, Cal-PX clearing prices stated in the 30.5 mills to 32.4 mills/KWh range for peak power. Off- peak started low at 20.4 mills Monday but rose into the 24.5 mills/KWh vicinity for the rest of the week. Prescheduled loads on the Power Exchange were below average, peaking at just 485 GWh for Friday.
The Alberta Power Pool took to flight with prices reaching above 550 mills/KWh on Tuesday. By Thursday the hourly fluctuations saw prices move between 65 mills and 500 mills-even though loads were not great. Several generation outages pulled bidders out of the market, pushing high-cost peaking units into the price curve. Overnight power did not fall below 40 mills/KWh all week [Arthur O'Donnell].
With Traders Away, Gas Prices Lack Conviction
Natural gas prices moved up and down quite a bit late in the week, but it was not because of strong demand. In fact, remaining traders reported very light market activity because many of their colleagues were in Houston attending the annual GasMart conference.
Prices had been narrowing during much of the week, but then plummeted Thursday before a late rally restored some of the losses.
What struck some was that there was too much gas in northern pipelines with not much demand from California power generators for fuel. " The gas has no place to go," one trader reported. Thin spreads between basin, borders and CityGates meant "It's not worth transporting anything. I think people are selling just to move supplies."
While the Southern California Border price had been up to $2.85/MMBtu earlier, it dropped to the $2.73 to $2.75/MMBtu range Thursday. San Juan was $2.63 to $2.65/MMBtu, while Permian was $2.68/MMBtu midweek, however, late trades Thursday showed San Juan at $2.70 and Permian at $2.73/MMBtu.
Price swings were largely because of a hike to NYMEX benchmarks late in the day, driven by colder weather in the East.
The Alberta price held steady and higher all week, moving from $(C) 3.56/Gigajoule to $3.65/Gj [A. O'D.].
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