Western Price Survey / Archives
March 21, 2003
Moderation continued its hold on the spot electric market this week, with mild weather and modest prices for electric generator fuel providing a calming effect. Power prices appear to have steadied themselves after late February's volatility, though traders are concerned about low yields from the upcoming hydro runoff season.
"We're sort of back to where we were: a low water year," said one trader, noting that precipitation this week and last managed to add some "short-term water" in the West. By current appearances, the snows of winter have all but passed, which could mean less water with which to douse summertime peak loads.
The continued shutdown of Pacific Gas & Electric's Diablo Canyon No. 2 may have given temporary support to prices this week. The utility had expected to restart the plant from a scheduled fuel outage but changed its outlook on Wednesday, saying it hopes to ramp up the 1,105 MW unit before the end of the month. PG&E spokesperson Jeff Lewis said a "bad seal" on one of the reactor's cooling pumps must be replaced, which usually takes about a week.
Other unexpected generation outages this week include PG&E's 260 MW La Paloma No. 4 plant and Duke Energy's Morro Bay No. 1 (163 MW) and No. 3 (337 MW) units, according to California Independent System Operator reports.
On Thursday night, unit 4 at the coal-fired Four Corners generating complex in New Mexico curtailed all 750 MW of capacity for unscheduled repairs. The plant ramped to 50 percent output Friday morning and is expected to return to full power later today or Saturday.
Peak-hour demand on the Cal-ISO grid remains in the low 29,000 MW range.
Prices for heavy-load hours at most hubs exhibited narrower shifts throughout the week than in recent times. At Mid-Columbia, peak prices rose to 47 mills midweek, with California-Oregon border premiums notching up to 50 mills/KWh. NP15 and SP15 hit 55 mills and 54.5 mills, respectively, and prices at Palo Verde stretched to 52 mills/KWh.
For off-peak energy, the spread tightened further. Trades at most hubs held in a 4 to 6 mills/KWh range, except for Mid-C, where prices played between 30 mills and 37.25 mills/KWh.
At the Alberta hub in Canada, receding loads appeared to keep real-time prices in check despite an oddly timed jump to about 461 mills/KWh for the hour of 1 pm on Thursday. Demand ranged from 6,211 MW for light- load hours to only 7,634 MW during the evening peak [Jason Mihos].
BPA Dumps Daily Offer
Starting this week, the Bonneville Power Administration ended its practice of reporting how much surplus energy it offers for sale each day. BPA, which sells to its customers power produced from the Columbia River system and then markets any excess, began posting the information in 1996.
BPA spokesperson Bill Murlin maintained that in providing such data, the federal marketer was out of step with other industry players.
"We were a little more transparent than everybody else was and we really don't see a need to be that way," he said, adding that knowledge of BPA's daily offers "could encourage people to take certain positions in the market, which is not the intent" of the posting.
Murlin said the information was meant to inform BPA's existing "preference customers"-some 139 public power entities in four Western states-of available surpluses for sale. Instead, the information "was being used by the entire market," he said.
Parties interested in buying power from BPA must call and make a specific request; Bonneville will not divulge how much total surplus power it has to sell for a given day, according to Murlin. Preference customers still command priority for surplus energy [J. M.].
Gas Dabbles in Docility
Spot prices for natural gas withdrew this week despite continued low inventory amounts and the approaching storage injection season. Daily premiums followed April and May gas futures on the NYMEX exchange, which rode lower in response to activity in the oil market.
Crude oil futures have been dropping since a US-led military invasion began tearing apart portions of Iraq this week. The bombing campaign thus far has served to ease investors' minds that future oil supplies will be available in sufficient quantity.
The federal government reported that the amount of gas in storage nationwide thinned by about 85 Bcf compared to the previous week, landing at 636 Bcf. A year ago, stored gas totaled 1,636 Bcf.
Figures from Western price points showed tight trade ranges for this week's bilateral market. Permian Basin gas traded between $4.50 and $5.03, with neighboring San Juan seeing prices between $4.20 and $4.95/MMBtu. Down at the Southern California border, supplies stayed above $5 for most of the week and ranged between $4.85 and $5.20/MMBtu.
Prices at CityGate reflected activity at Topock, cresting at $5.26 and moving as low as $4.90/MMBtu. At Malin, gas loitered at about $4.80 all week, posting a high of $4.89 and a minimum of $4.64/MMBtu.
Gas at Canada's AECO hub clipped between $4.41 and $4.50/MMBtu [J. M.].
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