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Western Price Survey

Week's End Edition
March 23, 2007
Off-Peak Electricity Flirts With Pricing Abyss, Then Picks Up Strength

The price of off-peak power traded on the Western spot markets fell to astonishing lows this week with mild temperatures, slack demand and moist conditions in the Northwest. Prices, however, ticked upwards for Monday deliveries traded Friday.

Normally flush with hydroelectric power this time of year, the Northwest was given an "extremely moist" rating last week under the Drought Severity Index administered by the U.S. National Oceanic and Atmospheric Administration. In addition, the U.S. Geological Survey reported Friday streamflow conditions ranging from normal to much above normal for parts of Washington. California coastal areas, however, were below normal.

At Mid-Columbia, off-peak electricity values did not push past 20 mills the entire week and dropped to a bottom of 8.50 mills/kWh for the Friday-Saturday package traded Thursday. On Friday, off-peak power in the area spread between 9 mills and 19 mills/kWh.

Mid-C peak power, which moved from 23 mills to 27 mills/kWh Monday, jumped all the way up to 37 mills/kWh Wednesday and beat that mark Friday, when the commodity found a summit of 42 mills/kWh.

Off-peak prices were also relatively cheap at the California-Oregon border, trading Friday at about 28 mills/kWh, though nighttime power had been priced as low as 14.25 mills/kWh the previous day. Peak values, at around 36 mills/kWh Monday, climbed to a range of 37 mills to 45 mills/kWh for Thursday deliveries, then hit 46 mills/kWh in Friday trading.

California prices were a bit more robust. North of Path 15 and South of Path 15 daytime power traded a bit above 50 mills/kWh most of the week, while nighttime power, which went as high as 34 mills/kWh Monday, jumped to around 37 mills/kWh for deliveries next week.

Daytime power at Palo Verde went from 44 mills to 52 mills/kWh Monday, but dropped to around 50 mills/kWh for Thursday deliveries, where it stayed Friday. Low-demand power, around 20 mills/kWh midweek, jumped to 33 mills/kWh in Friday trading.

The California Independent System Operator reported peak demand this week of 30,854 MW, which was reached at 8 p.m. Monday. Demand hovered a bit below 30,500 MW most of the week.

The 1,314-MW Unit No. 2 of the Palo Verde nuclear plant returned to full power Tuesday after reportedly being shut down over the weekend for maintenance. On Thursday, the Cal-ISO reported 8,367 MW of curtailments to the grid. Among them, the 299 MW Unit No. 4 of the Encina plant was on an unplanned outage.

A recent study from the Lawrence Berkeley National Laboratory indicated that the introduction of green power to the grid could suppress wholesale electricity prices, though this increase could be partially offset by a run-up in capacity prices [Chris Raphael].

First Storage Injection This Year Fails to Suppress Natural Gas Prices

The U.S. Energy Information Administration Thursday reported that 17 Bcf of natural gas went into storage for the week ending March 16, but the move failed to prevent gas prices from rising in that day's trading. Rather, gas values fell Friday as traders apparently anticipated low weekend demands.

The EIA reported that the East withdrew 10 Bcf of natural gas, while the West added 7 Bcf and producing states put 20 Bcf into storage. All told, natural gas stocks are approximately 300 Bcf below stocks last year, but 18.5 percent above the historical five-year average. Temperatures in the U.S. were reportedly 28 percent warmer last week than average.

Natural gas futures, however, actually rose Thursday by 25c to reach $7.16/MMBtu. On Friday, however, Henry Hub futures were at $7.27/MMBtu, a loss of 70c from the previous day.

Permian Basin gas tumbled to a low spread of $5.15 to $5.52/MMBtu in Friday trading, though the commodity had traded up to $6.15/MMBtu the previous day. San Juan Basin natural gas fell from a high of $5.99/MMBtu for Friday deliveries to a spread of $5.02 to $5.29/MMBtu for Saturday deliveries. The commodity had gone for a low of $4.78/MMBtu for Tuesday deliveries.

Southern California border gas fell to $5.34/MMBtu Friday after trading as high as $6.35/MMBtu on Thursday. Malin natural gas, however, held its ground. Traders moved the commodity between $6.37 and $6.55/MMBtu on Friday, though it had been priced as low as $6.11/MMBtu on Monday [C. R.].

Western Electricity Prices
Week's End: March 19 - 23, 2007
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 26.45-424.36 8.90-51.59
Mid-Columbia 19.50-42 8.50-20
COB 34.25-47 14.25-28
NP 15 47-56.50 18.50-37.50
SP 15 46.50-56.50 21.50-37.75
Palo Verde 43.75-52 19-33.50

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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