Western Price Survey / Archives
March 24, 2000
Western power prices edged upward this week, mainly in response to transmission line curtailments. A line outage between British Columbia and the Pacific Northwest bolstered regional prices as it limited imports of hydro and a host of transmission line deratings into and within California translated into disparate zonal prices.
With extremely warm weather hovering over California midweek, utility demand was low but that did not stop prices from moving higher. Many traders were out of pocket Wednesday and Thursday while attending the Western Systems Power Pool meeting in Denver.
A big jump was noted in Bonneville Power Administration's daily surplus offering, which bounded from 30 mills to 34 mills/KWh in the Northwest and from 31 mills to 35 mills/KWh at the California/Oregon Border for a full 24-hour package. Off-peak prices remain surprisingly high-even the California Power Exchange moved up to 27 mills/KWh for overnights midweek before slipping back to 23.5 mills for Friday deliveries. Mid-Columbia peak prices were also elevated because of slack hydro availability and an inability to take Canadian power as usual.
Mid-Columbia reached 29.5 mills before slackening to 27.5 mills/KWh, and off-peak came in close at 26 mills/KWh, traders said. Veteran traders are still somewhat amazed at the flatness of prices; a year ago, off-peak power was trading at half the cost.
Limits on the Intertie system kept COB at 31.25 mills on-peak and 26.75 mills/KWh off-peak. The southbound California/Oregon Intertie was held to 922 MW early in the week but loosened to 1,579 MW by Thursday. Northbound was also limited to 1,339 MW in daytime hours and 1,096 MW at night. Thursday's Path 15 curtailments to about 650 MW north/south and 1867 MW south/north were a little less severe than earlier in the week but still contributed to price differences between Northern and Southern California.
The California Power Exchange peaked at 33.7 mills on Thursday but eroded to 32.6 mills for Friday. With off-peak PX prices falling from the pinnacle of 27 mills midweek to 23.5 mills/KWh, some thought there might be some downward pressure at other northern bilateral hubs.
The Southwest market suffered from some generation outages and transmission constraints. The fire-related outage in New Mexico last Saturday did not have much lasting impact, but significant cuts to transfer capacity at Mead and McCullough in Nevada and at Palo Verde pushed desert prices up to 34 mills late in the week. Adding to the pressure was word that operator Arizona Public Service will trim Palo Verde No. 1 output to 70 percent over the weekend for minor repairs. Off-peak power remained in the low-20s, and the PV price came down to 29.5 mills to 32 mills/KWh when traders realized there would be no difficulties meeting load despite the nuke curtailment, though.
The Alberta Power Pool was still experiencing a price roller-coaster, with daytime pool prices frequently peaking at 500 mills/KWh and off- peak rarely falling below 40 mills/KWh [Arthur O'Donnell].
Gas Prices Follow NYMEX Lead
A late rally to NYMEX forward prices for April came too late in the day to affect Thursday's daily spot market, but traders anticipated some effect on Friday's natural gas trading.
The general trend for the week had been steady to lower at Western basins and borders. With warm weather in California and associated low utility loads, there really was not much call for new supplies.
Traders suggested the late NYMEX action was really a "technical rally" rather than prompted by weather forecasts or storage concerns.
With moderating weather in the Midwest, Permian dropped from $2.66/MMBtu to $2.63/MMBtu. San Juan Basin prices moved between $2.56 and $2.62/MMBtu.
The Southern California Border price featured a wide range this week; it clocked as high as $2.90 and as low as $2.74/MMBtu, traders reported. The late Thursday price point was about $2.87/MMBtu.
Malin held steady at $2.72 to $2.73/MMBtu.
Alberta was also variable, starting the week low at $(C) 3.46/Gigajoule, rising to $3.54/Gj midweek but settling at $3.53/Gj [A. O'D.].
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