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Western Price Survey

Week's End Edition
March 20, 2009
Electricity Prices Inch Higher

Electricity prices throughout California and the Northwest moved up this week, with average prices at some hubs jumping more than $3/MWh. Off-peak at the Mid-Columbia hub saw the biggest increase, with average prices closing at $26.60/MWh, up $3.45 compared with Monday's $23.15.

Western natural gas prices also saw moderate increases at hubs throughout the region, with average prices moving up a few cents/MMBtu.

On the Nymex exchange, natural gas for April delivery closed Friday at $4.23, up 3 cents. Friday's close was up from a mid-week low of $3.68, which was the lowest close for a near-month contract in six and half years, according to the U.S. Energy Information Administration.

Futures prices have tumbled since last summer as industrial demand contracted in the wake of the economic downturn, which has led manufacturers to slash workforces and close plants. But prices for deliveries throughout 2010 and 2011 are firmer.

The crude oil market got a big boost this week after the Federal Reserve unveiled a plan to buy $1 trillion in government debt and mortgage-backed securities. Wall Street rallied Thursday on the news, and so did crude, with light sweet crude for April delivery surging to more than $50 a barrel before falling back Friday as the dollar rose against the euro.

Warmer temperatures throughout the country reduced the need for heating fuel, and withdrawals from storage fell slightly. Prices have also been pressured by a persistent supply overhang. Working gas in storage, at 1.651 Tcf as of March 13, was 326 Bcf higher than this time last year, according to the EIA, and remains about 228 Bcf higher than the five-year average.

Since Monday, California daytime electricity prices have risen in tandem. Both North of Path 15 and South of Path 15 prices traded at an average of around $34/MWh Friday, up about $2. Nighttime deliver region will see m ies at both hubs averaged about $25 Friday, up around $2 at both hubs (see chart).

Average prime Palo Verde trades jumped up to $30.85, up from $28.46 Monday, and off-peak values rose to $22.46 from $20.38.

Electricity demand, at 27,544 MW on Friday, was well below Tuesday's peak demand forecast of 29,200 MW, according to the California Independent System Operator. The ISO forecast peak demand on Saturday of 26,158 MW.

Peak California-Oregon border prices settled at an average of $31.45/MWh today, up $1.68 compared with Monday. Off-peak values climbed nearly $2.60 during the week, to settle at an average $26.97/MWh.

Average Mid-Columbia prime values increased slightly between Monday and Friday, to settle at $29.23, while off-prime trades advanced more than $3 to average $26.60

Weekend rain: After a balmy week on the California coast, San Francisco has rain the forecast for Saturday and temperatures in the high 50s, with gusty winds forecast for Sunday and a return to partly sunny weather on Monday, according to AccuWeather. The Los Angeles area will see mostly cloudy skies on Saturday with temperatures in the 60's, and could see thunderstorms by Sunday. Sunny skies return to LA on Monday with temperatures in the high 60s. Very warm and partly sunny weather lingers in Phoenix through Saturday before it turns very windy on Sunday, Accuweather said.

The forecast calls for rain in Seattle this weekend but by Monday the chance of rain lessens although skies will remain cloudy. Temperatures will remain in the mid 50s. Portland will see partly sunny skies on Saturday with a chance of showers and rain on Saturday and Sunday. Snow is also expected to fall this weekend in the southern Oregon and Northern California mountains this weekend, according to AccuWeather [Mavis Scanlon].

Western Electricity Prices
Week's End: March 16 - 20, 2009
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 13.47-50.90 14.32-32.06
Mid-Columbia 26.25-30.00 20.50-27.15
COB 28.00-32.25 22.25-27.75
NP 15 28.75-34.60 21.75-26.05
SP 15 28.00-34.50 20.00-25.75
Palo Verde 26.35-31.25 17.50-22.75

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

The Western Price Survey is excerpted from Energy NewsData's comprehensive regional news services. See for yourself how NewsData reporters put events in an accurate and meaningful context -- request a sample of either or both California Energy Markets and Clearing Up.

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Contact Chris Raphael, editor with questions regarding Price Survey Content.

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