Western Price Survey
March 24, 2006
Power markets in the West currently are adrift in the doldrums of spring, when cold-weather-driven pressure on the price of electricity is fading and the vagaries of summer weather have yet to take its place. Monday marked the first day of spring, as well as the start to an uneventful week in the day-ahead electricity markets. Without a glance at the calendar to confirm the date, most transactions in the Western spot market could easily have been mistaken for trades conducted last week.
North of Path 15 peak-time power started off the week moving for between 50.75 mills and 52 mills/KWh. The next two days of trading saw the price slip by a mill or two, settling right around the 50 mills/KWh mark on Wednesday. Weekend power trading on Thursday brought the price down even further, but it managed to rebound on Friday. Off-peak power at the NP15 delivery point drew as much as 40 mills/KWh on Wednesday after spending the previous two days closer to the 38 mills/KWh level. End-of-week trading brought the price up as high as 47 mills/KWh.
In Southern California, day-ahead power changed hands for between 51.25 mills and 52.50 mills/KWh on Monday. The price hardly moved during the next few days of trading, but transactions on Friday were influenced by a bit of a boost in gas costs, and the day closed at a high of 54 mills/KWh.
The Northwest also saw little movement in the price of spot electricity during much of the week. Daytime power at Mid-Columbia hovered in the range of 43 mills to 45.25 mills/KWh. Nighttime power did its best to match that spread, attracting between 42 mills and 44.50 mills/KWh.
On Friday, the cost of off-peak power overtook the price of peak power at the hub. Daytime deliveries ranged from 45.50 mills to 47 mills/KWh that day, while nighttime power drew between 46 mills and 47.50 mills/KWh.
Palo Verde power prices seemed little affected by the shutdown of Unit No. 1 at the Palo Verde nuclear power plant. As announced a few weeks ago, Arizona Public Service took the unit off line this week to make preparations for a more extended outage in June. The derates are necessary to fix a persistent and, at this point, costly vibration in some of the facility's pipes.
Peak-time power at Palo Verde opened the week trading for between 48.50 mills and 50 mills/KWh. The price slipped down to between 45.75 mills and 47.25 mills/KWh on Thursday for weekend deliveries before rebounding to close out the week moving for as much as 52.50 mills/KWh. Off-peak power at PV attracted the lowest bids in the West this week, easily keeping below the 40 mills/KWh mark until Friday, when next-Monday power changed hands for a high of 44 mills/KWh.
In other nuclear generator news, San Onofre Nuclear Generating Station Unit No. 2 remains off line because of a refueling outage. The 1,122 MW unit is slated to return to service next week. In the Northwest, the Columbia Generating Station is scheduled to be ramped down to 60 percent of its 1,180 MW full output next week in order to repair a condenser tube leak. That nuclear facility should be back up to full power a few days later [Shauna O'Donnell].
Gas Fights Vainly the Old Ennui
Spot-market trading of natural gas in the West nodded off this week, as fundamentals in the region pretty much flat-lined. Fuel demand for electric generation has yet to make its presence felt in the Western states, as mostly mild weather and mediocre demand blanket the region.
If the Energy Information Administration's most recent storage report is any indication, supply looks to be plentiful as well. The country now has 1,809 Bcf of gas in underground storage, an astonishing 66 percent more than the five-year average figure of 1,085 Bcf.
Monday and Friday trading sessions proved to hold the most promise on the sell side this week, as the price of natural gas steadily slipped during the middle of the week. The swell in spot prices on Friday piggybacked on a rise in the futures price of oil that was driven primarily by fears about Nigerian supply. Pipelines in that country are under attack as a battle over control of Nigeria's natural resources has escalated.
At the Permian Basin producing hub, gas cost between $5.99 and $6.14/MMBtu on Monday. The price dropped as low as $5.80/MMBtu but closed Friday moving for a high of $6.15/MMBtu. At the Topock receipt point in Southern California, gas traded for a low of $5.95/MMBtu on Thursday before quickly gaining to close out the week for a high of $6.35/MMBtu [S. O'D.].
Archives of the Western Price Survey for the past year are also available online.
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